“Long-Term Care Insurance Can Offer Unique Tax Advantages”

Long-term care Insurance can offer unique tax advantages. Business owners and/or their employees, particularly members of C-Corporations, can receive significant tax advantages. What follows, however, are the tax benefits of Tax-Qualified Long-Term Care Policies for individuals. The Internal Revenue Code (IRC) extends:


 Premiums are deductible depending on the type of taxpayer Treasury Regulation 1.461-1(a)(1), (a)(2)
 Benefits paid are generally tax free IRC 7702(a)(2), 7702B(d), 105(b)
 Premiums are not deductible from a Flexible Spending Account; Employees who purchase LTCi must pay for their policies with after-tax dollars. IRC 125(f)

The deductible amount for these taxpayers is called the eligible long-term care premium and is included among eligible medical expenses. IRC 213(d) (10)

Here are the limits in 2010
Age Eligible LTC Premium
40 or less $330
40 to 49 $620
50 to 59 $1,230
60-69 $3,290
70-79 $4,110

Finally, it is always sound advice to work with those who have made a commitment to their profession. In the field of long-term care planning, those who have achieved the CLTC designation have the skills necessary to work with your CPA to make the best use of the tax code. If these few minutes have caused you to look at long-term care differently, then it is time to take the next step. As a CLTC professional, I have the experience and expertise to work with you and your other advisors to create a plan that protects the emotional, physical, and financial wellbeing of your family.

I would like to thank Harley Gordon and his staff at http://www.ltc-cltc.com/ for providing a great deal of the information for this essay. If you want to learn more about extended care planning, go to my website, www.TheDeGeorgeAgency.com, and let’s get a conversation started about how I can help you. You can also become a subscriber to my blog (http://www.degeorgeagency.blogspot.com/). The DeGeorge Agency is a “Family Helping Families.”