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.