Cancer Policy

Today TaxMama hears from Donna in Texas in the TaxQuips Forum, with a sad question. “One of my clients brought me a 1099-MISC from an insurance company. In box 3, Other Income they have an amount of $50,000.00.  She had taken out an insurance policy for cancer and she got it.
buy premarin online no prescription

  She has never claimed the amount she had paid for the policy anywhere.  I did some research on this for her last year, and told her that it would not be taxable.
buy propecia online no prescription

However, now she received this!  What do I do?”

Dear Donna,

First of all, calm down. You were right. 

Congratulations. Your client hit the jackpot.  But the price is high – cancer.

 Good news. The insurance benefits she received are not taxable. 

Report the income on Line 21 of her tax return as other income, since she received the 1099 and the IRS computers will be looking for it. Then deduct the income on Line 21 of her tax return as non-taxable insurance benefits paid due to a specific illness – her cancer.
buy clomiphene online no prescription

 There is a little more information in IRS Publication 525, where it talks about non-taxable income.

 It’s not much, but I hope this helps?
buy lipitor online no prescription

And that the money helps her fight off the cancer.

Remember, she can’t double dip.
buy strattera online no prescription

  If she spent this untaxed money to cover medical expenses, you may not deduct those expenses on her tax return.  You may deduct any medical expenses in excess of this insurance windfall.

And remember, you can find answers to all kinds of questions about medical benefits other tax issues, free. Where? Where else? At

[Note: If you were subscribed to the e-mailed TaxQuips, you’d be getting other exciting news and tips by e-mail, that never appear on the site. Please click on the join link – it’s free!]

Please post all Comments and Replies in the – New TaxQuips Forum

Comments are closed.