If you own a permanent life insurance policy (“whole life”), you may be able to borrow against the cash value. These loans are secured by your ownership interest in the policy, so they may carry a relatively low rate of interest. What’s more, generally you aren’t required to repay these loans according to a fixed schedule. Interest that accrues without being paid is simply added to the amount of your loan balance. If you don’t pay attention, though, you can end up with an unexpected tax bill. (more…)
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Life Insurance Loan Turns to Tax Debt
Wednesday, January 5th, 2011Medicare Tax on Investments: First Look
Wednesday, June 16th, 2010Taxation of investments will undergo one of its most significant changes ever in 2013, when the Medicare tax is set to begin applying to investment earnings of higher-income individuals. Although this tax is years away, investors and their advisors need to be planning for it now as it will affect strategic decisions they make this year, including Roth conversions and capital gain realizations. Here’s a first look at the new tax. (more…)
