Life insurance agent commissions & taxes when agent is also policy owner/premium payer?
If one is the owner & premium payer of the life insurance premium on a Univ. Life policy, as well as the sales agent and receives a 1099 for commission income (mainly first year commissions), is this commission taxable or can it be deferred should the life insurance policy be sold as a Life Settlement? If not, can the premium be deducted against the commission under these circumstances? (The original policy was a 10 year term that that ended and was recently converted to a permanent Univ. Life product). -Thank you!
- RUSeriousLv 78 years agoFavorite Answer
Any income that you receive is taxable regardless of how you obtained it. This includes, but is not limited to, any income that you receive as a result of selling yourself an insurance policy.
- mcglauflinLv 43 years ago
the known fee for an agent with a lifestyles coverage employer is 50-fifty 5%. while you're self sufficient and sell a lifestyles coverage the commissions selection any the place from 10% to, i've got seen as severe as, a hundred thirty five%. the advantages of being an agent is which you often get education, ingredients, finished reward and E&O expenses besides as some i'm forgetting top now. often once you're an agent there are particular stages which you would be able to hit the place you start to receive larger fee or bonuses due on your production. With those bonuses you may certainly make 75-eighty% fee on lifestyles regulations. maximum lifestyles coverage companies have a administration shape in place. this suggests that an supervisor's allowance is equipped in to the fee shape which i've got seen brokers receive while you're a great sufficient producer. i've got additionally seen workplace allowances. Now i've got stated an excellent variety of dissimilar issues i've got seen contained available. It varies from employer to employer in what they provide and what they call each and each bit. It will pay to do your learn yet undergo in recommendations the grass continuously seems greener on the different element. do no longer forget approximately too that lifestyles coverage will pay residuals that are often won't bypass with you in case you regulate businesses.
- Anonymous8 years ago
The fact that the commission is paid to you on your own policy is irrelevant. Income is income so taxes are due on the commission for the life insurance policy you sold to yourself, just like any other policy you sold.Source(s): http://answers.iquote.com/