Katie, a self- employed CPA, purchased an accident & disability insurance policy. As the result of an auto accident, Katie was unable to work and received $3,000 of disability benefits per month for seven months. The benefits were based on her estimated monthly income and should be reported as gross income.

Question

Quizplus · Accepted Answer

Disability benefits received from a policy purchased by an individual with after-tax dollars are generally not taxable and do not need to be reported as gross income.

Katie, a Self- Employed CPA, Purchased an Accident & Disability