Long-Term Care Insurance Premiums are Tax Deductible
Did you know that premiums for long-term care insurance are always tax deductible?
Individuals must meet the 7.5 % of Adjusted Gross Income for medical expenses. Long Term Care Insurance, just like health insurance premiums, help meet that threshold.
However, if premiums are paid by a sole proprietor, LLC or other business’, the 7.5% threshold does not have to be met. There is a schedule of deducibility based on age, but the deduction applies to the first dollar.
Employers who pay for employee’s long term care premium can also be deducted including premiums for a spouse (great tool to create ‘golden Handcuffs!).
Remember, however, that the tax deduction only applies to the premiums for long term care. Many policies are hybrid and include life insurance. There is no tax deduction for the life insurance part.
Consult your tax advisor for the specifics in your case. Pay attention to line 16 and 17 on your 1040 Schedule 1
When you are ready to talk to an expert about your Long-Term Care Insurance plan, schedule a call: calendly.com/jimbetter. Find more long-term care resources in our blog.