Long Term Care Insurance Premiums Tax Deductibility and Tax Benefits
Did you know that long term care insurance exist? Purchasing an LTCI plan offers advantages other than assistance and care for activities of daily living. Tax deductions are available for policy owners, allowing a more flexible reason why investing on coverage can be a good and important investment.
LTC Premiums Tax Deductibles
Individual
Depending on a policyholder’s age and source of income, the Internal Revenue Service identifies tax-qualified LTC premiums as an expense. Older policy holders can experience higher deductions, mainly because the LTC cap increases with age.
Self-employed
Higher and noticeable deductions can be experienced by self-employed individuals. Additionally, taxable income can be reduced further if the self-employed has a spouse or dependent to include eligible premiums.
C corporation deduction
The highest tax deduction can be received for individual’s part of a C corporation. C corporations are not subject to age limits, which can result in 100% LTC tax reductions.
Other Tax Benefits
Additional tax incentives can be gained from cash-value life insurance and nonqualified annuities. Interest from these can be sued to pay for LTC premiums. Additionally, most states grant tax credits for individuals who purchase LTCI.