What INSURANCE DIVIDENDS means: Amounts paid to policy holders are not dividends on capital stock, but are a rebate of a portion of the premiums paid for the insurance. Such dividends reduce the cost of the insurance and are not taxable unless in excess of the total premiums paid. Interest paid when the dividends are left with the insurance company is reported to the taxpayer as interest and is taxable.
- Definition Income Averaging:
- Dictionary farmers may sometimes reduce tax liability by computing their income tax as if their current farm income had been spread evenly over the preceding three years. The term also is sometimes used when insurance dividends definition.
- Definition Investment Interest:
- Dictionary Investment interest is interest paid on money borrowed to purchase or hold investment property. Investment interest is deductible as an itemized deduction to the extent of net investment income insurance dividends explain.
- Definition Individual Retirement Arrangement (IRA):
- Dictionary retirement arrangement is a trust set up to receive retirement contributions of individuals. The arrangement may be in the form of an individual retirement account or individual retirement annuity insurance dividends what is.
- Definition Internal Revenue Service (IRS):
- Dictionary The division of the U.S. Treasury Department responsible for collecting taxes insurance dividends meaning.
How works Insurance Dividends meaning in Tax definitions I .
