Page 69 - Growing Old Without a Plan for Long Term Care is not for Sissies_Neat

What Does the IRS Have to Say About This? 51 Chapter 9 What Does the IRS Have to Say About This? f your long term policy is federally tax qualifed, then the benefts Iyou receive from your policy are not considered taxable income. In addition to this, you may be able to deduct part or all of the premium on your federal taxes. Federal tax law allows deductions for people who incur expenses for long term care services or who buy Long Term Care Insurance. If you itemize deductions, you may be able to deduct expenses for long term care if your total medical expenses exceed 10 percent of adjusted gross income (AGI). Also, premiums for tax qualifed Long Term Care Insurance may be deductible with certain age based limits, again when your total medical expenses exceed 10% of AGI. Most Long Term Care Insurance policies sold today are tax qualifed, but be sure to ask your agent if the plan s/he is sug- gesting is federally tax qualifed. Following is a chart that shows the amount of your premium that is tax deductible for 2014. The eligible amount goes up each year. Federal Tax Deductble Limits for 2014 Age 40 or less $ 370 More than 40 but not more than 50 $ 700 More than 50 but not more than 60 $ 1,400 More than 60 but not more than 70 $ 3,720 More than 70 $ 4,660