Couple Can Deduct up to $9,100 in 2013, Business Owners Can Cover Spouses Explains American Association for Long Term Care Insurance
LOS ANGELES, CA--(Marketwired - Dec 6, 2013) - There is still time to secure a significant 2013 tax deduction for having long term care insurance purchased prior to the end of the year with an increased deduction next year according to an industry expert.
"The tax deductibility of long term care insurance remains one of the best kept secrets," explains Jesse Slome, director of the American Association for Long-Term Care Insurance(AALTCI). "The federal government and a number of states encourage long term care planning by offering tax deductions and tax credits. The federal deduction can be as much as $9,100 for a couple with this protection in place."
Slome notes that there is still time for individuals to take advantage of the tax deduction by acting prior to the end of the year. "Plus, those who already own tax-qualified long term care insurance coverage may qualify for a tax deduction this year even if they were not eligible in prior years," Slome points out. To take advantage of the deduction, individuals must itemize their tax deductions and meet personal medical expense limits.
"After retirement people typically have little or no income to report so it takes less to meet the medical expense threshold for itemized deductions," Slome explains. "At the same time, the tax deductible limits for long term care insurance increase as you age, so a 70-year-old can deduct up to $4,550. Two spouses each with coverage could deduct twice that amount. So, even if you didn't qualify last year, don't overlook the potential to take a deduction this year."
Business owners and self-employed individuals may benefit from enhanced tax-deductible treatment. "It may be possible to deduct eligible long term care insurance premiums for spouses and even for eligible dependents," Slome notes. Small businesses established as C-Corporations can benefit from complete tax deductibility of tax qualified long term care insurance as a business expense similar to traditional health and accident insurance, the expert points out. "They can typically select who is covered and some insurers will offer discounts when multiple individuals are covered," Slome adds.
2013 and 2014 Tax Deductible Limits For Long Term Care Insurance
Tax-deductible limits for individuals start at $360 for individuals who are age 40 or less prior to the close of the 2013 tax year and increase to $4,550 for those who are more than age 70. The complete Internal Revenue Service (IRS) 2013 and 2014 long term care insurance tax deductible limits can be accessed on the Association's website.
"Individuals who have procrastinated all year about looking into long term care insurance have a valuable reason to start now before the year ends," Slome advises. "But don't wait until the last week because it takes time to get necessary information and complete and submit an application and payment."
The Association advises individuals work with a knowledgeable long term care insurance professional. "Even when the cost is tax deductible, you don't want to overpay for coverage," Slome notes. According to the annual AALTCI Long Term Care Insurance Price Index, costs for virtually identical protection can range from 30 to 92 percent...