topic Re: Insurance policy surrender in Retirement tax questions

Insurance policy surrender

lo213 — Mon, 25 Nov 2019 19:51:44 GMT

A life insurance policy on me was cashed in that was opened with my Social security number. It incurred a taxable income of over $39,696 that I became responsible for. I got a 1099-R and had to pay about $10,000 in taxes on my 2017 tax return. Someone told I could claim those "taxes" paid on my 2018 return. Is that true? If so, where would I claim that on my return? And can I go back and amend my 2018 return to claim those taxes paid in 2017?

Re: Insurance policy surrender

Critter — Mon, 25 Nov 2019 22:13:39 GMT

On the 1099-R there was taxes WITHHELD not PAID ... so on your return you should have entered all the information on the 1099-R as printed and the withholding would have been added to all your other withholdings on the tax return to balance off the taxable portion of the distribution. So review your return ... did you get the credit for the withholding ?

Re: Insurance policy surrender

Critter — Mon, 25 Nov 2019 22:15:34 GMT

Now ... on your 2018 return ... any federal taxes paid in 2018 for the balance due on the 2017 return MAY be entered on your state return as a deduction but it is NOT a deduction on the federal return.

Re: Insurance policy surrender

VolvoGirl — Mon, 25 Nov 2019 22:21:48 GMT

So what was in box 4 on the 1099R? Was there an amount for Federal income tax withheld? That amount should be included on 2017 1040 line 64 or 1040A line 40. Was it? Did you owe the 10,000 in addition to the taxes taken out?

Any taxes you paid on your 2017 return don't affect your 2018 return. You might be able to deduct federal taxes paid on a State return. What state?