The IRS provides a partial tax deduction for owners of Long Term Care insurance!

Home Health Aide coming to provide assistance

Sharing an important point the last day of November’s Long Term Care Awareness Month. Owning what I like to call Long Term “Health” insurance can have a positive effect on taxes for some individuals.

How? The IRS considers the cost a person has for a tax-qualified Long Term insurance plan a medical expense. Thus, when they complete their annual IRS 1040 tax return they are eligible to take an age based partial deduction

The deduction, though small for many, is the specific amount shown in the following age range list not the annual cost they pay for their plan. Having a tax deduction of any size results in their overall plan cost being a little lower!

The IRS reports the allowable deduction which can be used when completing the 2019 1040 is:

-•- age 40 and under = $420. The same as in 2018.

-•- 41 through 50 = $790. Up from $780.

-•- 51 through 60 = $1,580. Up from $1,560.

-•- 61 through 70 = $4,220. Up from $4,160.

-•- 71 and older = $5,270. Up from $5,200.

How to take this deduction? The amount from this schedule can be added to any other unreimbursed medical care expenses. If an under 65 person’s total medical expenses are above 10% of their Adjusted Gross Income this amount is a deduction. Individuals 65 and older can deduct amounts if medical expenses are above 7.5%.

John C Parker, RHU, LTCP


The federal government tells us owning Long Term Care insurance is important!

November and Long-Term Care awareness month is almost over but wanted to share a couple things “Uncle Sam” is telling us about Long Term Care insurance:

The U.S. Department of Health and Human Services’ Administration On Aging site focuses on long term care services & supports highlights five Myths vs Facts – about Long Term Care – insightful!

This page of the Basics Section of the site has information on Who Needs Care. One statement is very important:

” Poor diet and exercise habits increase your chances of needing long-term care.”

Additional information focused on long term care here in CT can be found on my site:

 

John C Parker, RHU, LTCP