The amount you can deduct on your taxes as a result of buying long-term care insurance has been increased by the IRS for 2013.
If you itemize your deductions, you can generally deduct part of your premiums if the premiums, together with your other unreimbursed medical expenses, amount to more than 10 percent of your adjusted gross income (or 7.5 percent if you are age 65 or older).
The maximum amount of premiums you can deduct each year depends on your age at the end of the year. For 2013, the maximums are:
Age———-Maximum Deduction
40 or less——–$360
41-50————$680
51-60————$1,360
61-70————$3,640
Over 70———-$4,550
For policies issued in 1997 or later, the premiums are deductible so long as the policies meet certain requirements. For instance, they must give you the option of “inflation protection” and “non-forfeiture protection.” For policies issued before 1997, the premiums are deductible if the policies were approved by the state insurance commissioner. (You do not have to choose these options, but the policy has to offer them.)
The rules for deductibility are different if you are self-employed. In that case, you can generally take the deduction as long as you made a net profit, even if your medical expenses do not exceed 10 percent of your income.
Ms. MacDonald’s practice is limited to Estate Planning, Probate, Conservatorships, Elder Law & Trust Administration.
Ms. MacDonald’s practice is limited to estate planning, probate, conservatorships, elder law and trust administration. Ms. MacDonald maintains her practice in the Santa Clarita Valley at 25115 Avenue Stanford, Suite B-124 in Valencia, California. She can be reached at 661-294-6464.