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Wallstreet Esq.
Wallstreet Esq., Tax Attorney
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Experience:  10 years experience
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My employer has paid the premiums for a life insurance

Customer Question

My employer has paid the premiums for a life insurance policy for me for the last 10 years. When I retire, I am supposed to deduct the PS58 costs from the current cash value to determine the taxable income when the policy is assigned from the employer to me. I have looked at the tax returns and don't see PS58 referenced. If my accountant has been paying a tax on the value of the employer's premium payments, where would that number appear on my 1040 return?
JA: The Accountant will know how to help. Is there anything else the Accountant should be aware of?
Customer: no'
Submitted: 1 month ago.
Category: Tax
Expert:  Lane replied 1 month ago.

Hi, My name's Lane, I can help here.


PS 58 (called table 2001 costs now) represents the cost of insurance (essentially the term premium cost) fo a policy, given a certain death benefit.


The way this is typically done if employer paid is the PS 58 costs are included in the wages on your W-2 for the tax year in question.


You'll then see an informational notation for the ps58 cost in box 14.


If not, then you may get a 1099-R with a code 9, and will then enter on line 16a and b on the 1040

Expert:  Lane replied 1 month ago.

line 16a is the total amount of cash, 16b is the taxable portion (cash value in excess of ps58 costs)


Please let me know if you have any questions at all, before rating me


If this HAS helped, and you DON’T have other questions … I'd appreciate a positive rating (using the stars or faces on your screen, and then clicking “submit") ... Otherwise JA doesn't credit me for the work here.


Thank you!


I hold a law degree, (Juris Doctorate), with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in financial accounting & tax, a BBA, and CFP & CRPS designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice, since 1986

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