Taxes and Long Term Care Insurance
In 1996, the US Congress passed
the Health Insurance Portability and Accountability Act of 1996
(HIPAA) that gives tax advantages to people who purchase a Tax
Qualified Long Term Care Insurance policy. The
premiums may be added to other medical expense deductibles,
and then deducted from the amount which is more than 7.5 percent
of the adjusted gross income on the federal income tax return. The
amount which can be claimed depends on the age of the taxpayer,
please see chart to the left. In addition, your state may offer
additional tax advantages, click
here to find out.
This
was one of the first of the many steps that the government is
taking to make Americans aware of how important Long Term Care
Insurance is.
Limits
on the Deductibility of Long Term Care Insurance Premiums, 2010
Age |
Maximum
Deduction |
40 or
younger |
$330 |
41-50 |
$620 |
51-60 |
$1,230 |
61-70 |
$3,290 |
71 and
older |
$4,110 |
Source: IRS, 2009
It is
also important to check with a personal tax advisor to see how much
you can deduct.
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