Savings That Can Be Made On Life Insurance Tax tagged: , , , , ,

Savings That Can Be Made On Life Insurance Tax

Posted by in Personal Finances

There are many different types of insurance across the United States and none of them are more important than life insurance. This type of policy is most commonly taken out by individuals that own a business or a company or those who just wish to have some sort of protection for their family. Life insurance policies are designed to provide your family members with a lump sum of money to take care of any debts you may leave them with and leave them with enough funds to replace the salary that you were providing for them during your life. The question that many people have though is, is life insurance tax deductible?

The simple answer is yes, but the policy must be an IRS tax qualified cover in order for you to be eligible for any type of tax deductions. To gain your life insurance tax deductions on a policy issued before 1st January 1997 you must meet a number of different criteria such as inflation; it is wise to employ the services of an accountant or a life insurance specialist to double check your policy qualifies for the deductions. By doing this you can ensure that nothing is missed and you attain all of the money that you are entitled to. If your policy was issued before 1st January 1997 then your policy will only be able to be approved by a commissioner.

Once you have ascertained that your policy is one of the qualified polices then you can claim back some tax. However, your Life insurance is only tax deductible if it is higher than 7.5 percent of your adjusted gross income or AGI. Again, as these case can be rather complex it is always a good idea to use an accountant or insurance tax specialist to help you. This will guarantee that everything is done above board and you do not miss out on any savings.