New 2013 Tax Deductions for Long-Term Care Insurance

There are new 2013 tax deductible limits for long-term care insurance (LTCi).  Some people, especially older people, may benefit because of this.

According to the Internal Revenue Service, tax-qualified LTCi premiums are considered a medical expense. For individuals who itemize tax deductions, medical expenses are deductible to the extent that they exceed current amount required to meet the individual’s Adjusted Gross Income (AGI). 

The amount of the LTCi premium treated as a medical expense is limited to the eligible premiums, as defined by the Internal Revenue Code 213(d), which is based upon the age of the individual. You are able to take up to the limit defined by your age as the medical expense.

Individual taxpayers can treat premiums paid as tax-qualified LTCi for themselves, their spouse, or any tax dependents as a personal medical expense.  See the table below for the yearly maximum deductible limit per individual policy owned.

 

 

2013 Long Term Care Insurance Federal Tax Deductible Limits

Source: IRS Revenue Procedure 2012-41

 

Taxpayers Age at End of Tax Year

Deductible Limit

40 or less $ 360
More than 40 but not more than 50 $ 680
More than 50 but not more than 60 $ 1,360
More than 60 but not more than 70 $ 3,640
More than 70 $ 4,550

 

 

Many people who do their own taxes may be unaware of this deduction.  It’s also common for many people to wait to discuss long-term care insurance until they have health risks preventing them from qualifying for coverage.

The best time to buy Long-Term Care Insurance is when you are healthy and young.  The younger you are the less expensive it will be.  With the newer insurance products available, there are numerous other types of products that provide long-term care protection.  No matter what your age, any licensed Retirement Life Solutions Specialist can discuss your options and provide the best solution for your specific situation.

 

What is Life Insurance?

Cost of Life Insurance?

 

The information presented in this article is not offered as tax advice. Examples of tax benefits shown are based upon the United States IRS Code listed. You should consult with a professional tax advisor regarding your specific situation.
Twitter Digg Delicious Stumbleupon Technorati Facebook Email