Agent Owner, Gilmore Insurance Services, Marysville, Washington State
Can you claim disability insurance on your taxes? Yes or No, depending on how you've accounted for your premiums tax wise. In most cases the premium you pay for disability insurance is paid from taxed dollars, in other words after tax dollars. In that particular situation any benefit you collect would be consided not to be subjected to income taxes. So you would not have to show disability payments on your tax return in that case. Now, if the premiums are deducted for tax purposes, the benefit collected would be considered taxable.
If you have a business plan that includes executive benefits and one of those benefits is disability insurance, you can elect to deduct it and increase your benefit to around 80% of your compensation, but the benefits will be taxable at ordinary income tax rates. Consult your tax adviser before moving forward with the deduction.
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If you have a business plan that includes executive benefits and one of those benefits is disability insurance, you can elect to deduct it and increase your benefit to around 80% of your compensation, but the benefits will be taxable at ordinary income tax rates. Consult your tax adviser before moving forward with the deduction.