| Would you rather pay more taxes or buy long term care insurance? Below are some of the tax incentives that the federal government provides for purchasing long term care insurance. |
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Eligible LTC premiums (see chart) and LTC expenses not covered by insurance can be deducted in the same manner as medical expenses.
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LTC insurance benefits received are generally not taxed.
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Medical Savings Accounts and Health Savings Accounts--Eligible LTC premium is a qualified medical expense.
- Self-employed individuals can deduct 100% of the Eligible LTC insurance premiums paid for self and dependents.
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Employers can generally deduct the full LTC insurance premiums paid for employees, spouses and dependents.
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Nonprofit corporation employees and C-corporation employees can exclude 100% of the LTC insurance premium paid by their employers.
Eligible LTC Insurance Premium Amounts 2008
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Attained age before the close of the taxable year
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Limitation on Deductions
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40 or less
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$ 310
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41 to 50
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$ 580
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51 to 60
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$ 1,150
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61 to 70
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$ 3,080
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71 or older
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$ 3,850
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The above information is not tax advice and should not be relied upon by you. Please consult your tax advisor for specific advice regarding your own personal situation.
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