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January 31, 2021
Question

Group Life Insurance

  • January 31, 2021
  • 3 replies
  • 53 views

I retired in 2018 and my former employer sent a W2 this year showing a taxable benefit in boxes 12a - 12d with codes C, M & N for Group Life Insurance coverage over $50,000. C = 1,310.64, M = 81.26 and N = 19. From what I have been able to dig up I understand that M & N are owed as uncollected Social Security and Medicare taxes. It seems my refund was reduced dollar for dollar for M & N. But the reduction of my refund was around $300 for the entry in C (which I never found any documentation for owing taxes on that). If C is taxable, why would the tax rate be in the vicinity of 22.9% (300 / 1,310.64) when my top tax rate is still in the 12% range? Thanks.

    3 replies

    fanfare
    Level 15
    January 31, 2021

    just enter the W-2 as it appears the money in Code M, N you will have to pay s tax due.

    fanfare
    Level 15
    January 31, 2021

    Code C amount is taxable and TurboTax knows how to calculate your tax.

    That's what you're paying for.

    fanfare
    Level 15
    January 31, 2021

    don't confuse your average tax rate with your next-dollar tax rate.  add another $100 of income to find the next-dollar rate..