Life Insurance Payout How Long
How much do I owe taxes on retirement money I inherited from my father?
I just received a notice to $ 5,000 more or less payments due to me as the beneficiary of a retirement program that my father would have been eligible for had he lived a few more years. It is tax free, and I have been given the option to tax (a percentage that you can choose) held in lieu of paying later. I will not give up too much of it (more than it should), but otherwise not want to risk the money because the IRS can not afford to pay if I am unemployed at the time of next year's taxes. At this point, I have Social Security (SSI completely tax free) as my only income, but I will probably lose because of this payment (as well as life insurance payment). So can anyone give me a good idea of what the taxes would be $ 5,000 in this if you have no other income next year (apart from life insurance $ 10,000 is not taxable)? How much should consider retention to ensure that these taxes are paid? (I live in South Carolina.)
Personal exemption and standard deduction is more than that, so I do not think he would pay no tax on it.
