Taxes
I’m a Florida resident, widowed, head of household. Income last year 41000. It’s from SS,Ira distribution and pension. I have a whole life policy of 36,291. that I want to cash out. I realize that 36000 would be taxable gain bringing my total foor next year to about 77000. I’m guessing that would be about 15000. I would owe in taxes. Is there something I could do to avoid this giant tax hit. Thank you
Terry Says
Well, first of all, you’re not considering the ONLY hit that would come from a higher income. Your Medicare monthly payment would go up sharply for a year or two as it is based on your income!
I don’t know the terms of your insurance policy, but you can BORROW tax-free from most policies! That would get your money out (denting your death benefit) without requiring you to pay taxes. I suggest contacting the company and asking about that alternative.
(Beware of contacting an agent who might want to “switch” you into a policy in which he/she would get a new commission!!)
