Does Disability Insurance Get Taxed?

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   Steve Savant

   Syndicated Financial Columnist, Host of the weekly talk show Steve Savant's Money, the Name of the Game, Scottsdale Arizona

   Non deducted disability insurance benefits are tax free, generally up to 60% of your compensation. However, if your have a business and your have operational deductions, you could deduct the disability insurance premium and secure up to 80% of your compensation. But benefits would then be taxed at ordinary income tax rates.

   Answered on July 27, 2013

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