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The Federal Government passed the Health Insurance
Portability and Accountability Act of 1996 (HIPAA). This act designated
two types of long-term care insurance policies. Tax Qualified policies
may be eligible for tax deductions and must adhere to standards
set forth by HIPAA. Non Tax Qualified policies are not eligible
for tax deductions and do not have to adhere to the standards set
forth by HIPAA.
Which is the best policy for you? Please to discuss this and we can go over this in more detail for
you and provide a recommendation for you.
Tax Incentives
Individuals
According to the table below, a portion of your long-term care insurance
premiums may be included as a medical expense. If your total medical
expenses exceed 7 1/2% of your adjusted gross income, the excess
can be included as an itemized deduction. For couples, double the
individual amounts.
| Attained
age at the close of the taxable year 2007 |
Allowable
medical expense |
|
40 and younger |
$290 |
| 41
- 50 |
$550 |
| 51
- 60 |
$1,110 |
| 61 - 70 |
$2,950 |
| Older
than 70 |
$3,680 |
| Attained
age at the close of the taxable year 2008 |
Allowable
medical expense |
|
40 and younger |
$310 |
| 41
- 50 |
$580 |
| 51
- 60 |
$1,150 |
| 61 - 70 |
$3,080 |
| Older
than 70 |
$3,850 |
Self-Employed
LTC Insurance premium up to the above limits is now treated like
health insurance for the self-employed tax deduction, which was
70% for 2002 and 100% for tax years 2003
on. Self-employed means sole proprietorships, partnerships,
"greater than 2% shareholders" of S-corporations or Limited
Liability Corporations. Consult your tax advisor.
There are additional tax incentives for C-Corporations. If you
would like information on this please and we can provide this information to you.
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