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Tax deductibility of Long Term Care Insurance

The presentation discusses the tax benefits of long term care insurance and how as you age, it becomes even more important. Those that are self-employed can especially benefit from long term care insurance through a variety of tax benefits.

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Tax deductibility of Long Term Care Insurance

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  1. Tax Deductibility of Long Term Care Insurance

  2. Long Term Care Insurance (LTCi) • LTCi is a retirement planning tool used to protect your assets from the high cost of needing long term care • Examples of long term care services are home health care, assisted living, hospice, adult day care, or nursing homes

  3. Two Options • LTCi policies are either IRS tax-qualified or non-tax-qualified • One way to deduct your LTCi premiums is by owning a HSA

  4. How They Are Deducted • Tax-qualified long term care premiums are considered a medical expense • Medical expenses are deductible for an individual who itemizes tax deductions

  5. Aging • As you age, your tax deductible limit increases • By the time you are over 70 you can deduct $4,550

  6. Individual Deduction • Considered a medical expense and can be deducted if you itemize • Deduction increases with age and becomes more meaningful

  7. Self-Employed Deduction • Great deduction for self-employed because it comes off the top of your income • Can include eligible premiums paid for your spouse and dependents too

  8. C Corporation Deduction • A C corporation gives the greatest tax deduction • You can deduct 100 percent of the LTC premiums

  9. State Income Tax Credits • Half of the states offer some form of tax credit • Some range as high as 25 percent of the total premiums paid

  10. Disclaimer • This is NOT tax advice in anyway and should be used only as general information.  Please consult with your tax pro and or the IRS for more information.

  11. For More Information • Visit www.ltctree.com • Call 800-800-6139

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