Deducting Long-Term Care Premiums

It is a little known fact that long term care premiums can be tax deductible. It is possible to deduct a portion of the premium if your policy meets the right standards, and you itemize deductions on your tax return.

Sliding Age Scale

The amount of your premium that you can deduct is based on a sliding age scale. Generally speaking, the older you are the more you can deduct. For 2010, the following limits apply: 40 or under can deduct $330; over 40 but not older than 50 can deduct $620; over 50 but not older than 60 can deduct $1,230; over 60 but not older than 70 can deduct $3,290; and over 70 can deduct up to $4,110.

The Rest of the Equation

Your long term care premiums must be added to the rest of your medical bills to determine if you qualify. You can only take advantage of the deduction if your total medical bills for the year exceed 7.5 percent of your adjusted gross income.

With the potential to deduct long term care premiums, this is another benefit of buying this type of coverage. To ensure accuracy, check with your tax professional before deducting the cost of long term care insurance.

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