Tuesday, 5 December 2006
Long Term Care Insurance: Deduct More
Many Americans don’t know that long term care insurance (LTC) costs can be tax deductible. Sometimes, the full cost of a LTC policy can be deducted.
For 2007, the Internal Revenue Service (IRS) set the amount you can deduct even higher. It’s an incentive for people approaching retirement to invest in long term care insurance.
Under the new rules:
- Anyone 40 years old or under can deduct $290
- People over 40 but not yet 50 can deduct $550
- People over 50 but not yet 60 can deduct $1,110
- People over 60 but not yet 70 can deduct $2,950
- And anyone over 70 can deduct $3,680
About 50% of people over the age of 65 will need long-term care — and without LTC insurance, it can be extremely expensive. Now that much of the cost of LTC insurance can be tax deductible, it’s an even more affordable investment.
“Increased tax deductible limits are another indication of the government’s commitment to encourage Americans to purchase protection against the possible risk of needing long-term care,” said Jesse Slome, the Executive Director of the American Association for Long-Term Care Insurance.
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