Long-Term Care Insurance Premiums May Be Tax Deductible
"Some people haven't qualified for the deduction in prior years and may overlook this important opportunity to benefit," explains Jesse Slome, director of the long-term care insurance industry group. "The maximum tax deductible amount for 2019 could be as high as $10,540 for a couple who both have tax-qualified long-term care insurance policies."
To qualify and be eligible for the tax deduction, policies must meet tax-qualified standards. "Most of the traditional long-term care insurance policies sold over the past years meet this standard which generally is denoted in the policy," Slome explains.
Linked-benefit or hybrid long-term care insurance policies generally do not offer the tax deductibility benefit. "A linked-benefit long-term care policy typically is a life insurance policy and I know of only one where a small part of the premium paid may qualify for the deduction, so it pays to ask," Slome notes.
Older tax filers are more likely to benefit from the opportunity to deduct their long-term care insurance premiums. "Premiums are eligible to be included under medical or health-related deductions which may be deductible when they exceed 7.5% of their adjusted gross income," Slome explains. The 2019 tax deductible limit for an individual age 70 or older is $5,270.
Beginning in 2020, the threshold amount increases to 10% of AGI. "More older Americans may be eligible for this deduction in 2019," Slome says. "After retirement your income generally is lower making it easier to meet the threshold,. Adding in those long-term care premiums to other expenses for medical care, dental, vision and drugs can enable someone to become eligible for the deduction. It's an opportunity not to overlook when preparing your taxes."
To see long-term care insurance tax deduction limits for various ages as well as pertinent information, visit the association's website at https://www.aaltci.org/
To learn more about long-term care planning visit the Association's website or to connect with a specialist who can explain both traditional and hybrid products contact the Association via their website or call 818-597-3227.