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Posted by LTC Staff
LTC Staff
Staff writers for LTC.com
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on Thursday, 09 August 2012
in LTC Insurance

Tax Advantages of Long Term Care Insurance for Individulas

As Baby-Boomers across the country reach retirement age, the United States Government has realized that implementing federal programs to cover the cost of Long Term Care services is not feasible. The cost would simply be too great. As a result, the federal government has encouraged individuals to take responsibility for their own Long Term Care planning and offered certain tax incentives to help Americans do so. Tax Qualified LTC plans offer some very valuable tax advantages.

Tax Qualified Long Term Care plans are considered a medical expense and are therefore treated much like health insurance by the IRS. For individuals who itemize deductions, a portion of Long Term Care premiums are tax deductible. Any medical expenses, including Long Term Care premiums, exceeding 7.5% of the individual’s Adjusted Gross Income are deductible up to certain limits. The IRS sets these limits based on the individual’s attained age at the end of the taxable year and adjusts them annually for inflation. Please see below for the 2012 limits.

Taxpayer’s Attained Age at End of Tax Year

Deductible Limit

Age 40 and Under

$350

Age 41-49

$660

Age 51-59

$1,310

Age 61-69

$3,500

Age 70 and Over

$4,370

 

In addition, benefits received from a Tax Qualified LTC policy are generally not taxable and not included in the individual’s Adjusted Gross Income. If you would like more information about Long Term Care insurance, or if you would like to receive a quote for Long Term Care coverage, please contact us at 1-800-432-0091 or fill out our online submission form for a free rate comparison.

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