Long term services and support costs in Conn continue to increase

 

The Mature Market Institute, a Westport Connecticut based research organization, which focuses on aging. longevity, and the generations. They recently released information about their 2011 survey of long term service and support costs.

The Hartford Business Journal online news had a summary of their findings on October 25th.

The Institute’s  report makes this important point. “Costs continue to rise for those requiring long-term care in the U.S. The state of the economy, combined with rising heath care and energy costs, are having a significant impact on long-term care rates. ”

The full report can be downloaded here.

+ Nursing Home costs for different parts of  Connecticut can be found on page 20 of the report.

+ Assistant Living costs in Connecticut are on page 28.

+ Home Care costs are on page 36.

+ Adult Day Services costs are on page 44.


IRS Increases tax deduction for Long Term Care insurance

 

Individuals who purchase a tax qualified Long Term Care insurance plan are eligible for a tax deduction. The IRS, since 1996 has used an age based schedule to establish the deductible amount. In Revenue Procedure 2011-52 the IRS reports the updated amounts for 2012 are:

-•- age 40 and under = $350

-•- 41 through 50 = $660

-•- 51 through 60 = $1,310

-•- 61 through 70 = $3,500

-•- 71 and older = $4,370.

An individual who wants to take advantage of this deduction adds the allowed amount to any other medical expenses they have when completing their annual 1040. Any amount of medical expenses above 7.5% of their AGI becomes a deduction.

When this special family protection is purchased through a business there are additional tax advantages. The tax regulations provide employers more flexibility than with health insurance.

  • A Sole Proprietor can deduct up to the age based schedule amount. It is not subject to the AGI limitation applied to individuals.
  • Businesses operating as a Partnership, or in an LLC , can take the full premium as a business expense. The owner(s) then take the age based amount as a personal medical expense deduction. Premium amounts above the schedule would generally become taxable income to the owner.
  • Incorporated businesses: The entire premium is a business expense and there is no taxable income to the employee when the premium is paid or when benefits are received.
  • One special advantage in the IRS’s Long Term Care tax regulations is the ability to allow a plan to be purchased just for the owner and spouse or select executives such as Vice Presidents and their spouses.