IRS Announces 2017 Tax Deduction Schedule for LTC Insurance

Tax cut

Long Term Care Insurance is a product many Americans have in place to safeguard current or future retirement income and assets from the high costs of extended Long Term Health Care. These policies are also tax deductible.

The policies have attractive tax treatment under IRC 7702(b). Premiums can be tax deductible if you have enough medical related deductions, you are self-employed or own a LLC, S-Corporation or C-Corporation. C-Corporations can deduct 100% of the premium. Otherwise the IRS publishes a chart each year which indicates the amount deductible based on age.

The IRS has increased these amounts for 2017.

“The tax-deductibility of premiums when you purchase traditional Long Term Care insurance provides a real incentive for consumers, especially after retirement,” explains Jesse Slome, director of the American Association for Long-Term Care Insurance (AALTCI).

“The special tax advantages are not available when individuals purchase linked-benefit products such as life insurance or annuity policies that can provide a future Long Term Care benefit,” Slome said.

These “hybrid” plans generally offer single premiums with some type of death benefit. The benefits are generally tax-free but premiums are generally not deductible. There are some exceptions and you should consult a Long Term Care Insurance specialist for details on those exceptions.

With increased longevity and advances in medical science more people will require help with everyday activities. These “ADL’s – Activities of Daily Living” are things we take for granted like bathing, eating and dressing. People require extended care due to accidents, illnesses or the impact of aging. Health insurance or Medicare will only pay for a small portion of skilled care and they pay nothing toward the most common “custodial” care (help with ADL’s or supervision due to memory issues like Alzheimer’s or dementia). LTC insurance will pay for these costs.

“Many of my clients are able to deduct their premiums. Plus some of my clients own businesses, the self-employed, have additional tax benefits be it a sole proprietor, LLTC, S-Corp, or C-Corp,” said Matt McCann a nationally known expert on LTC planning.

“Only traditional Long Term Care insurance policies have the benefit of potentially being tax-deductible to an individual. After retirement when income typically declines, tax deductions can take on a significant added value to take advantage of,” said Slome.

Proceeds from LTC insurance are always tax-free.

Starting in 2017, all individuals may deduct qualified medical expenses that exceed 10 percent of adjusted gross income (AGI) for the year.   For 2016, individuals age 65 and older the threshold remains at 7.5 percent of AGI.

Premiums paid for traditional LTC insurance are included in the term ‘medical care’ when itemizing on a personal return. You should seek tax advise if you are self-employed or own a corporation as deductions are more favorable.

Click here to see the tax-chart and more details:

http://longtermcareplanningnews.com/articles/irs-announces-2017-tax-deduction-schedule-for-ltc-insurance

The time to learn how to safeguard your future retirement income and assets is before you retire when you enjoy better health and can take advantage of much lower premiums. See how affordable Long Term Care Insurance can address the financial costs and burdens of aging. Learn more and get free quotes: www.mccannltc.net – www.quoteonltc.com

 

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About Matt McCann

Matt McCann is recognized as a leading Long Term Health Care (LTC) specialist. Since 1998, Matt has been a national leader in finding solutions for the physical, emotional and financial burdens LTC places on American Families. He has been recognized by the American Association for Long Term Care Insurance as one of the top specialists in the country. In 2015 he was listed among the top ten specialists in LTC planning in the nation. He has also worked in sales management for two of the leading organizations marketing LTC products. He served as Director of Business Development for ACSIA LTC and Senior Vice President/Sales for LTC Financial Partners. Many of his agents have been among the top LTC specialists in the industry. Matt's divisions have also led in an innovative webinar approach which allows agents to use screen sharing software so prospects can see the agent's desktop. Matt's proven areas of success include sales coaching, training and motivation in additional to being an experienced LTC specialist. He has produced results in total production, placement rates and lead efficiency. Matt is known for years of experience leading creative efforts for agent meetings and sales promotions which drove results for both agents and consumers. He is now focused on helping consumers find affordable solutions so they can protect their assets and never be a burden on family and loved ones. He specializes in LTCi, Critical Care and Asset Protection products. Matt also coaches individual agents throughout the country helping them improve their processes to help more consumers. Matt is also known as an effective public speaker on LTCi and LTC issues as well as sales motivation. He appears on radio and TV programs and is available for bookings. Because of his schedule an advance notice is always requested. Prior to dedicating his life to LTC, Matt was a well known radio station manager and personality, He worked at radio stations throughout the country He may be best known for as legendary Chicago radio personality Larry Lujack's co-host when Lujack came back out of retirement years ago. Matt can be contacted by email at http://mccannltc.net/ or by phone at 866-751-7957. You can follow Matt on Twitter: @mccannltc - https://twitter.com/mccannltc
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One Response to IRS Announces 2017 Tax Deduction Schedule for LTC Insurance

  1. Pingback: Tax Advantages Available for Long Term Care Insurance | Matt McCann's Blog

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