Long-Term Care Insurance Deductions Are Increased for 2016
The amount you can deduct on your taxes as a result of buying long-term care insurance has been increased by the IRS for 2016. If you itemize your deductions, you can generally claim a deduction if your 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 65 or older).
If you are 40 or younger, you can deduct $390 of your yearly premium payment, 41 to 50, you can deduct $730 of your yearly premium payment, 51 to 60, up to $1,460 of your yearly payment. If you are 61 to 70, you can deduct up to $3,900 of your yearly premium payment and from 70 years of age on – you can deduct up to $4,870 of the yearly premium payment.
The maximum amount of the premiums you can deduct each year depends on your age at the end of the year. For policies issued in 1997 or later, the premiums are deductible so long as the policies meet certain requirements, such as offering “inflation protection” and “non-forfeiture protection.” You do not have to actually choose these options, but the policy has to offer them. For policies issued before 1997, the premiums are deductible if the policies were approved by the state insurance commissioner.
Ms. MacDonald’s practice is limited to Estate Planning, Probate & Trust Administration. Ms. MacDonald maintains her practice in the Santa Clarita Valley. She can be reached at 661-294-6464.
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