topic Re: PS-58 Costs in Retirement tax questions

PS-58 Costs

JimmyH — Sat, 15 Feb 2020 20:50:23 GMT

I took an IRA taxable distribution in 2019, however I have I have PS-58 income that was previously taxed in the years of my contributions and I can now offset that PS-58 income from my taxable distribution. How do I do that in Turbo Tax?

Re: PS-58 Costs

macuser_22 — Sat, 15 Feb 2020 20:58:05 GMT

PS-58? Do you mean life insurance? That would have nothing to do with a IRA distribution whatsoever.

You may or may not receive a separate 1099-R from the live insurance company that will be totally independent of the 1099-R for the IRA distribution.

Re: PS-58 Costs

JimmyH — Sat, 15 Feb 2020 21:25:18 GMT

In early 1990's my pension plan supplied me with 1099-R's each year representing the life insurance portion that needed to be reported, both federal & state on my tax returns. Along with the 1099-R was a letter from the Pension Trustee advising to keep track of all PS-58 costs each year, as they were "deductible against the income you will receive from the pension plan at retirement". I don't know how to record these costs in Turbo Tax.

PS-58 Insurance Premium Costs on 1099R

jaelbiz11 — Thu, 03 Feb 2022 17:25:13 GMT

For qualified pension plans and where employer is paying the premium out of employer contributions, the participants must annually recognize the portion of the premium paid for the current year's insurance coverage, reporting the economic benefit as taxable income. The amount reported as income is equivalent to the premium paid on a term life insurance policy for 1 year for the face value of the plan policy.

When calculated for a participant, the plan administrator issues the participant a Form 1099-R to include in gross income for the year. The participant's account receives a basis for the cost and the participant is not taxed again on this basis when the insurance contract is distributed to the participant or when life insurance proceeds are distributed to the beneficiary.
See:

http://irs.gov/retirement-plans/fully insured 412e3 plans