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Stephen G.
Stephen G., Sr Income Tax Expert
Category: Tax
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Experience:  Extensive Experience with Tax, Financial & Estate Issues
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I have some whole life insurance poliicies that I am considering

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I have some whole life insurance poliicies that I am considering to drop. I understand that if I cash them in I will be taxed on anything that is over and above my total amount of premiums paid. The amount over my total premiums comes to $10,000. I am in the 25% tax bracket living in Georgia. Can you tell me how much tax I would have to pay on this amount?
Submitted: 5 years ago.
Category: Tax
Expert:  Stephen G. replied 5 years ago.

Stephen E. Grizey :

Hi & thanks for using our service. I'll do my best to give you a complete & accurate answer. Please ask me to clarify anything you don't understand.

Stephen E. Grizey :

Well, without knowing exactly where you fall in the 25% tax bracket, I can't be sure as when you add the $10,000. you may still stay within the 25% bracket or part of the $10,000. could be taxed at a higher rate. It sounds like you'd pay a minimum of $2,500. in Federal tax.

Stephen E. Grizey :

To be more specific with an estimate I'd need to know your filing status (Single or Married), number of exemptions, & your estimated taxable income (income after deductions and exemptions) not including the income from the insurance policies.

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