Long Term Care Insurance Guide Explores Tax Deductibility

Tax deductions and tax credits for long term care insurance may be one of the best kept secrets according to a leading industry executive.

To encourage more individuals and small businesses to plan for the eventual need for long term care, the federal government and a growing number of states offer tax deductions and even tax credits for the purchase of long term care insurance.  “There are separate rules for individuals and business owners who may be able to fully deduct the cost of this coverage,” explains Jesse Slome, executive director of the American Association for Long-Term Care Insurance, the national organization that advocates for long term care planning.

The Association has published a guide explaining highlights of the various rules governing individuals and various forms of businesses.  “There are so few tax advantaged ways to plan for and protect your future that taking advantage of every possible tax savings is a real bonus,” Slome states.  “We find many accountants are not aware of the rules and since they do not sell insurance have no incentive for talking to their clients about this opportunity.”

While individuals are only allowed federal tax deductions up to yearly maximums and must meet the 7.5 percent threshold for medical expenses, Slome who is one of the nation’s leading long term care insurance experts points out that after retirement, older individuals tend to have larger medical expenses which can make the cost of long term care insurance deductible.  “The maximum individual deduction available for 2012 can be as much as $4,370 per-person,” Slome adds.

Business owners enjoy special tax advantages when offering tax-qualified long term care insurance.  “Small business owners looking for tax deductible benefits today for a benefit that will be there after they retire or sell the business should look into this,” Slome advises.  “Plus, a number of insurers will offer small groups a discount which can even apply when only a few people are covered by the plan.”

Copies of the Guide To Tax-Qualified Long Term Care Insurance Protection can be obtained from members of the American Association for Long-Term Care Insurance.  The organization serves the public by educating Americans about the importance of planning for the risk of needing long term care.  For additional information on long term care insurance costs or to connect with a specialist member of the Association call (818) 597-3227 or visit the organization’s website.

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