Disability income is

		tax-free if you pay the disability insurance premiums.
		taxed at the long-term capital gains rate.
		taxed as ordinary income.
		taxed at the short-term capital gains rate.

Expert Solution

Disability is taxed as Ordinary Income.

A person has to pay taxes on disability income only if his/her total income falls over a certain threshold (depending on the jurisdication). But, in majority of the cases, Disability Income is not taxed.

jeff jeffy answered 3 years ago

Keith has a Disability income insurance policy that pays 60% of pre-disability income after a 6-month elimination period.

Keith has a Disability income insurance policy that pays 60% of pre-disability income after a 6-month elimination period. Keith’s pre-disability wage is $56,000 annually.a. What will be the tax treatment of the benefits received if Keith had paid all of the premiums himself?b. What would be the tax treatment if Keith’s employer had paid all of the premiums?

7. Which the following statements concerning disability insurance is correct? a. Benefits from a disability income...

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Johnson White is considering the purchase of a disability income policy and is trying to decide...

Johnson White is considering the purchase of a disability income policy and is trying to decide between two policies sold bhy two different companies.Although both will pay until age 65 for disability arising out of sickness, and for lifetime for disability resulting from accident;the cost of one policy is almost twice that of the other.What provisions in the two contracts would you advise White to compare?

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Disability income is

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