|
|
| |
| An Individual |
| |
|
According to the tax code, for people who itemize tax deductions, medical
expenses are deductible if they exceed 7.5% of adjusted gross income
(AGI). For an individual, the portion of the LTC insurance premium that
is deductible is determined by the age of the insured.
|
| |
| Age of insured indivdual before the close of the year |
2000 Eligible premium deduction |
| Age 40 or younger |
$220 |
| Age 41 - 50 |
$410 |
| Age 51 - 60 |
$820 |
| Age 61 - 70 |
$2200 |
| Age 71 and older |
$2750 |
|
|
| |
Example:
Sam is a 67 year old male and owns a tax qualified LTC policy with an
annual premium of $2600. He has an adjusted gross income of $50,000 with
$5000 of medical expenses ($2800 non-insurance expenses plus $2200
eligible portion of LTC insurance premium).
- The eligible portion of the LTC insurance premium is $2200 (from table)
- 7.5% of AGI = $3750 ($50,000 X 7.5%)
- Allowable deduction for medical expenses = $1250 ($5000 - $3750)
Tax Note
- Benefits received under a tax-qualified long term care insurance policy purchased by an individual are excluded from gross income
- If an individual purchases a policy on behalf of a parent who is not a dependant - he or she is not entitled to a medical expense deduction.
|
| |
|
Note: The previous interpretation is for general informational purposes only. This
website does not intend to present itself as a tax professional, but
rather to offer our opinion of the tax code as it relates to tax
qualified ltc insurance. Visitors are encouraged to consult their tax
professional as it relates to their personal situation.
|
| |
Partnership or S Corporation |
| Get A Quote |
| |
|
| |
|
|
| |
|
| |
• 
Supplement
