Long-Term Care Insurance Tax Deductions

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.