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Simplifying the process of understanding Long Term Care, and helping you decide if Long Term Care insurance is right for you.

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LTC Staff
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on Monday, 13 January 2014
in LTC Insurance

Tax Advantages of Long Term Care Insurance for Companies

Many leading companies have recognized the value of Long Term Care coverage as both a recruiting incentive and an employee retention tool. Because of certain tax advantages, Long Term Care coverage can be added to a benefits package with little or no cost to the company. The specific tax advantages vary based on the type of company.

For the Self-Employed, Long Term Care premiums can be deducted up to the limits for individuals, just like with health insurance premiums. Anyone with self-employed status can write off 100% of the individual limit regardless of the Federal seven and a half percent Adjusted Gross Income rule. The individual limits for 2013 are as follows:

 

Taxpayer’s Attained Age at End of Tax Year

Deductible Limit

Age 40 and Under

$360

Age 41-49

$680

Age 51-59

$1,360

Age 61-69

$3,640

Age 70 and Over

$4,550

 

For C-Corporations, like with health insurance premiums, Long Term Care premiums are fully deductible as a reasonable and necessary business expense. Premiums paid for business owners, their spouses and dependents and all other employees can be deducted in this manner. Premiums paid by the company do not count toward an employee’s Adjusted Gross Income and benefits are received tax-free.

Tax benefits for Partnerships, S-Corporations and LLCs combine aspects of the self-employed and C-Corporation benefits. Premiums paid for a partner’s or owner’s policy are deductible up to 100% of the individual limit (above) regardless of the Federal seven and a half percent Adjusted Gross Income rule. Premiums paid for all other employees are fully deductible as a reasonable and necessary business expense. Premiums paid by the company do not count toward an employee’s Adjusted Gross Income and benefits are received tax-free.

If you would like more information about Long Term Care insurance and how it can benefit your company from a tax standpoint as well as improve productivity and help you retain valuable employees, please call us at 1-800-432-0091 or fill out our free online request form.

 

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