Which of the following statements is true regarding premium tax treatment for disability income policies?

The statement that premiums for disability income policies are not tax-deductible is accurate because, in general, the premiums paid on individual disability income insurance policies are not deductible for tax purposes. This is primarily because these policies are typically owned by the individual for personal protection, and personal insurance premiums do not qualify as tax-deductible expenses under IRS regulations.

In contrast, there may be different tax treatments for premiums if the policy is purchased through a business or employer. However, when considering policies held by individuals for personal use, the fact remains that the premiums are not deductible, thus reinforcing the validity of this statement.

Understanding the nuances of how premiums for disability income policies are treated for tax purposes is essential for individuals managing their finances and planning for potential future income disruptions.