Premiums for long-term care insurance can be a tax deduction
Under IRS regulations, taxpayers can deduct a greater amount from their 2017 taxes due to the purchase of long-term care insurance. You can deduct premiums for long-term care insurance policies that are “qualified,” to the degree to which they, in conjunction with other medical expenses for which you are not reimbursed, including Medicare premiums, are greater than 10 percent of the adjusted gross income of the insured, or 7.5 percent for taxpayers age 65 or older.
The premiums, which represent the amount the policyholder pays the insurance company to maintain the effectiveness of the policy, can be deducted by the taxpayer, the taxpayer’s spouse and other dependents. The rules for tax-deductibility are somewhat different for a person who is self-employed. You can deduct the premium, provided you realized a net profit. It is not required that your medical expenses are greater than a specific percentage of your income.
However, there is a maximum premium amount that is deductible. This figure is dependent on the age of the plaintiff at the end of the year. Below are the caps on deductibility for 2017. Any premium amounts that exceed these restrictions are not deemed to be a deductible medical expense.
Age prior to the end of the taxable year / Maximum deduction for the year
- 40 or under / $410
- Over 40 but not over 50 / $770
- Over 50 but not over 60 / $1,530
- Over 60 but not over 70 / $4,090
- Over 70 / $5,110
The elder law attorneys at Hook Law Center assist Virginia families with will preparation, trust & estate administration, guardianships and conservatorships, long-term care planning, special needs planning, veterans benefits, and more. To learn more, visit https://hooklawcenter.com/ or call 757-399-7506.