IRS Long Term Care Deduction
Long Term Care Tax Deductions
One of the more frequently asked questions about long term care insurance is if you can’t afford the long term premiums are there any tax benefits to owning a long-term care policy that might help subsidize the premiums.
Here are some answers to those questions given by tax experts:
1. Long-term care premiums are deductible as a medical expense (subject to the 7.5 percent-of-AGI floor), although there are limits to the deduction based on the taxpayer’s age. For example, a taxpayer between ages 61 and 70 may deduct as much as $3,080 in 2008 ($3,180 in 2009). A couple filing a joint return can deduct as much as $6,160 in 2008, if each spouse pays premiums on qualified long-term care policies. Payments in excess of any LTC benefits may be deducted as medical expenses.
Categories: Income Tax, Insurance, Money & Finance Tags: hsa, irs and long term care deduction, long term care, long term care insurance
Are Long Term Care Premiums HSA Contribution
HSA Funds for Long Term Care Insurance Premium
Long term care premiums can take a huge bite out of your budget but there is a way to cut the cost a bit and it is all tax free. You can use an HSA account to pay your premiums for long term care. If you want to learn how to evaluate long term care policies in terms of rate increases see our post Long Term Care Insurance Rate Stabilization A health savings account (HSA) is a tax-favored savings account created for the purpose of paying medical expenses. Contributions to the HSA are 100% deductible (up to the legal limit) — just like an IRA. If you use the money to pay for qualified medical expenses you do not have to pay taxes.
