Members of the Maryland Association of Certified Public Accountants are answering readers' tax questions through April 15.
Q. If I cash in a life insurance policy, are the proceeds taxable income? Can I roll it over into an IRA account for tax purposes?
A. Proceeds received from the cashing in of a life insurance policy cannot be rolled over into an IRA because your life insurance is a personal asset and not part of a qualified retirement plan. The proceeds are taxable income to the extent the proceeds exceed your basis (cost) in the policy.
Q. I recently retired and will need to file quarterly payments. Can you give me some information on where to get the forms and what I have to do?
A. Federal quarterly estimated tax payment Form 1040ES may be obtained by calling 1 (800) TAX-FORM, or from your local IRS office. Maryland quarterly estimated tax payment Form 502D may be obtained by calling 1 (410) 974-3951. Instructions on how to estimate are included with the forms.
The above advice is for general purposes only and is not intended as legal, accounting or tax advice. Specific situations may vary.
To ask a tax question, call Sundial at (410) 783-1800. Call 268-7736 in Anne Arundel County, 836-5028 in Harford County and 848-0338 in Carroll County. Using a Touch-Tone phone, punch in the four-digit code 6225 after you hear the greeting.
Readers also can e-mail questions through The Sun's Web site -- www.sunspot.net.
Selected questions will be answered in the Business section. No questions will be answered by phone.
Pub Date: 2/20/97