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.
Great article on 2013 tax deductions for Long Term Care deductions.
Thank you for your comments. Let us know about other information we can provide about long-term care.
JS
Everyone over the age of 45 should be looking into Long Term Care Innsurance -
Melissa, we here at Life Insurance Think Tank could’t have said it better. Thanks!
JS
Most people say that long term care insurance is expensive and they don’t need this. But the truth is, this is a necessity these days since life expectancy is becoming much longer and thus more people will need assistance in carrying out their daily activities. It’s expensive if you don’t purchase early and if you don’t explore your other options. There are ways to bring your premiums down and it also helps if you know the long term care costs in your area.