Tax and the Long-Term Care insurance client

When we work with clients to educate them about the many Long-Term Care health insurance options available, sometimes Ed and I are asked whether LTC expenses, including Long Term Care insurance premiums, are tax deductible.

Understand, planning for long-term care involves a set of carefully thought out decisions, decisions best made with the guidance of an a professional. You need as much information as possible, so you can make educated choices, and it’s natural for you to want to know about tax deductibility as well.

While Ed and I do not offer tax advice (best to check with your own tax adviser for specifics in your own situation), we can give you a general idea of how long term care premiums relate to federal income tax.

  • Tax-qualified LTC insurance premiums are considered a medical expense.
  • Individuals who itemize tax deductions can treat premiums paid for tax-qualified long-term care insurance for themselves, their spouse or any tax dependents (such as parents) as a personal medical expense.
  • The yearly maximum deductible amount for each individual depends on the insured’s attained age at the close of the taxable year. The LTCi premium that exceeds the eligible amount not included as a medical expense.
  • For 2013, for taxpayers age 40 or under, the limit is $360. For those over 40 but under 50, $680. For those more than 50 but less than 60, it’s $1,360, and for those over 60 but under 70, it’s $3,640. For those more than 70, the deductible limit is $4,550.

There are many erroneous ideas about which long-term care expenses can be deducted and which cannot, and the best person to help you comply with the tax regulations is a qualified CPA.

However, as qualified LTC professionals, we wanted to give you a start, and we hope this helps. Have a question we didn’t cover? Link on the blue highlighted words or email us! We’re always happy to help you get the information you need.

~ Elise

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Long-Term Care insurance = being prepared for the future

Many of us think that if we have life insurance, Living Will, employer health insurance or private health, or Medicare, we’re all set. But unfortunately, that’s just not the case. I’ve seen what unexpected health crises can do when there hasn’t been forethought and planning, and it’s not pretty. In this regard, my insurance CLTC certification and training are important, but just as important is my 25 years of experience.

Because I know what CAN happen, I know how to protect you from as many potential problems as possible. As the co-founder of Your LTC Resource, my job is to assure that singles, couples and families are protected in as many ways as possible when it comes to their future healthcare needs.

That phrase “as many ways as possible” is incredibly important. We can’t know what our future mental or physical health will be. That’s why we need to have Long-Term Care insurance that is flexible as well as responsible.

Being flexible means both Long-Term and Short-Term Care insurance. It means taking a good look at your present health insurance policies, and finding the gaps. The more planning we do, the better prepared you’ll be for every health and financial contingency.

When you do our Long-Term Care planning homework, the payoff in your future is well worth the time.

~ Elise