Thinking about long-term care insurance (LTCI)? Hesitant because it is expensive? Did you know that you might be able to deduct some of the premium on your taxes?
If you are an itemizer, then you can take deductions as follows (2013 figures):
| Attained age in tax year | Limitation on premiums | |
|---|---|---|
| Age 40 or less | $360 | |
| Age 41 – 50 | $680 | |
| Age 51 – 60 | $1,360 | |
| Age 61 – 70 | $3,640 | |
| Age 71 and older | $4,550 |
Not an itemizer? You still can get a break – if all of your medical expenses, including LTCI premiums, exceed 7.5% of AGI, then you can claim a deduction on the portion of your medical expenses exceeding 7.5%.
So when you are looking at a LTCI quote, keep in mind that the actual cost to you may be a bit less than the annual premium.
And of course if you already have LTCI, make sure your CPA knows that you have it and how much you pay in annual premiums.