topic Re: death benefit in Get your taxes done using TurboTax

death benefit

jefemalaka — Wed, 11 Feb 2026 09:32:53 GMT

if i received a death benefit when my parent passed away, how much tax will i owe, and can i pay it now?

Re: death benefit

John-H2021 — Wed, 29 May 2024 17:32:35 GMT

If it is a death benefit from a life insurance policy then it is not taxable. If it is from a retirement plan it is taxable and taxes should be withheld when the money is disbursed to you.

Re: death benefit

jefemalaka — Wed, 29 May 2024 17:34:21 GMT

Hi again,

it was from a retirement plan. Do you know the % ill have to pay? (10% - 20%)?

Re: death benefit

jefemalaka — Wed, 29 May 2024 17:37:14 GMT

20% was withheld when it was disbursed, so im good right?

Re: death benefit

John-H2021 — Wed, 29 May 2024 17:40:35 GMT

The percentage of tax will be based on your total income from all sources.

Re: death benefit

jefemalaka — Wed, 29 May 2024 17:42:14 GMT

much appreciated! Thanks!

Re: death benefit

John-H2021 — Wed, 29 May 2024 17:43:04 GMT

20% is the standard withholding, you can use the refund calculator to make sure it is enough

https://turbotax.intuit.com/tax-tools/calculators/taxcaster/

Re: death benefit

Linda-SG — Wed, 29 May 2024 22:19:56 GMT

It depends. If the death benefit was an inherited traditional IRA, you will most likely pay income taxes at your ordinary tax rate on the distribution. (Not applicable to a Roth IRA, as long as the Roth IRA was open for at least five years.) Federal tax law requires withholding of 20% of the taxable portion of the lump sum benefit paid. If your ordinary income tax rate is more than 20%, you will pay the difference in taxes. It may help to use a Tax Calculator such as TurboTax's Tax Caster tax calculator to determine how much you will, or will not, owe when you file your taxes.