2007 TAX DEDUCTIBLE LIMITS FOR LTCi ANNOUNCED
November 9, 2006
The Internal Revenue Service (IRS) has announced increased deductibility levels for long-term care insurance policies purchased in 2007. According to Jesse Slome, Executive Director of the American Association for Long-Term Care Insurance, “millions of Americans, especially those who own small and mid-sized businesses are unaware that the cost of long-term care insurance protection may be tax deductible." In some cases 100 percent of the cost of coverage can be deducted.
“Increased tax deductible limits are another indication of the government's commitment to encourage Americans to purchase protection against the possible risk of needing long-term care," Slome notes.
“There is still time to tax advantage of tax deductions in 2006 and also benefit from the increased deductible limits next year." In addition to the federal tax deduction many states now offer tax incentives for individuals purchasing tax-qualified long-term care coverage.
The 2007 deductible limits under Section 213(d)(10) for eligible long-term care premiums includable in the term ‘medical care’ are as follows:
"Business owners, especially those with C-Corporations, can deduct the full cost of long-term care insurance protection for themselves and designated individuals, including spouses," explains Slome. "It's not just one of the few remaining tax deductible expenses available to business owners but an outstanding way to pay for post-retirement asset protection."
Attained Age Before Close of Taxable Year & Max. Limit
40 or less: $ 290
More than 40 but not more than 50 $ 550
More than 50 but not more than 60 $1,110
More than 60 but not more than 70 $2,950
More than 70 $3,680
Source: IRS Revenue Procedure 2006-53 (2007 limits)
The American Association for Long-Term Care Insurance (www.AALTCI.org) is the national association serving insurance and financial professionals who provide long-term care financing solutions.