“The IRS is aware of the growing non-compliance by seniors who fail to take minimum IRS distributions and is expected to crack down to capture lost tax revenue,” declares Jesse Slome, director of the American Association for Long Term Care Insurance (AALTCI).  Some reports note that as many as 250,000 seniors fail to take the minimum required distribution.

“The required minimum distribution is the amount the federal government requires you to withdraw each year, usually after you reach age 70½, from your retirement accounts,” Slome explains.  “You pay taxes on the withdrawn funds and failure to comply can result in a potentially hefty 50 percent tax penalty.”

“The amounts withdrawn could be used to pay long term care insurance premiums which could be fully tax deductible to the senior,” Slome notes.   “There’s a two-fold tax advantage, avoiding the income tax and potential penalty and of course the value provided by having the long term care insurance protection.”

Individuals who are age 70 or older can each deduct $4,550 of their premiums off their 2013 tax filings.  “If both spouses are over age 70, that’s a $9,100 potential tax deduction you don’t want to overlook,” Slome adds.   Individuals must meet certain levels of related tax-deductible expenses to claim the tax deduction for long term Care insurance.    “Many seniors have other medical and even dental expenses that enable them to easily meet the threshold required to make long term care insurance premiums deductible.”

Slome noted that seniors who do not already own this protection should work with a knowledgeable specialist who can help them navigate the health requirements imposed by leading insurers including Genworth Financial, John Hancock, Mutual of Omaha and Transamerica Long Term Care.  “Not everyone can health qualify for long term care insurance,” Slome shares, “and the health requirements can vary quite significantly from one insurer to the next.”

For information about long term care insurance tax deductions and costs  or to connect with a long term care insurance specialist who is a member of the Association call the organization at (818) 597-3227 or on their website at www.aaltci.org where access to free consumer guides is available.

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“Long term care insurance premiums can be a tax deductible expense and we believe a percentage of seniors neglect to take advantage of the deductibility,” declares Jesse Slome, executive director of the American Association for Long-Term Care Insurance, the national trade group.  “After retiring income typically drops and medical and health expenses increase to a point where premiums for long term care insurance can be deductible something people could mistakenly overlook.”

According to the Association, the Federal government and a number of states offer tax incentives as a way of encouraging more individuals to take personal responsibility for future long term care needs.  “For 2012, the maximum an individual could deduct is $4,370 or $8,740 for a couple where both spouses are insured,” Slome notes. “They may not have been able to capitalize on the deductibility during their working years when income precluded reaching the allowable medical expense ratio but after retiring it’s not all that difficult to achieve.”

Slome, who has authored The Guide To Tax-Qualified Long Term Care Insurance, a publication that has been distributed to over two million consumers, believes the tax deductibility of long term care insurance is one of the best-kept tax reduction strategies.  “That is especially true for self-employed individuals and those who own and operate small businesses where the cost of insurance may be fully tax deductible as a normal business expense,” Slome adds.  “This is one of the last ways an individual can derive a benefit for themselves and a tax deduction to boot.”

The national long term care insurance expert notes that the tax deductible limits are increased each year to keep pace with inflation.  “The 2013 maximum that a couple can deduct is $9,100 but most people will buy insurance protection that costs far less than this amount,” Slome admits.

Consumers seeking information on tax-advantaged long-term care insurance can find a designated professional via the organization’s website or should call the Association at (818) 597-3227.   Established in 1998, the Los Angeles, CA-based American Association for Long-Term Care Insurance is the national association serving insurance and financial professionals who provide long-term care financing solutions.

Don’t forget tax deductions for long term care insurance advises Jesse Slome, director of American Association for Long-Term Care Insurance

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