Ask The Taxgirl: Taxable Interest & Life Insurance

Taxpayer asks:

I received money from an insurance payout. Where do I put taxable interest in my return?

Taxgirl says:

Taxable interest is reported on a line 8a of your form 1040.

If the interest is more than $1,500, you may also need to file a Schedule B, Interest and Ordinary Dividends (downloads as a pdf).

You seem to already be aware that life insurance proceeds are otherwise typically not taxable for federal income tax purposes. You can read more about life insurance proceeds here.

The fine print

Be sure to read my disclaimer… Remember, I’m a lawyer, and we love disclaimers. But you know who loves them more? My malpractice carrier. Consider yourself warned.

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