Los Angeles, CA, January 02, 2013 --(PR.com
)-- More of what you pay for tax-qualified long term care insurance protection may be tax deductible starting in 2013. However, not all will enjoy the increased tax deductibility benefit reports a leading industry expert.
"The federal government and a number of states now offer excellent tax incentives designed to encourage more individuals to plan for the very real risk of needing long term care at some point in their life," explains Jesse Slome, executive director of the American Association for Long-Term Care Insurance. "Recently the Internal Revenue Service announced that the amount Individuals may be able to deduct would increase in 2013."
According to the organization, the maximum tax deductible limit an individual can deduct in 2013 will be $4,550. "The deductible limits are based on an individuals attained age before the close of the tax year," Slome shares. "Someone who is 70 or older could deduct the $4,550 maximum or literally as much as $9,100 for a couple."
The deductible limits begin at $360 for someone age 40 or less. "The typical buyer of long term care insurance today is between 55 and 65," Slome acknowledges. The deductible level for someone who is more than 50 but not more than 60 is $1,360 in 2013. "Being able to deduct the cost of long term care insurance is something people really need to look into, though there are limits," according to AALTCI's director.
For individuals, insurance premiums are considered a medical expense and only become y deductible for the person who itemizes tax deductions and to the extent that they exceed the prescribed percentage of Adjusted Gross Income. A second change impacting tax deductibility of long-term care insurance premiums is the increase of this percentage in 2013 from 7.5 percent to 10 percent for those under age 65.
"That change will not imp[act many," Slome predicts. "Individuals who are age 65 or older still utilize the 7.5 percent factor and that makes long term care insurance even more attractive as one of the last great tax deductible benefits individuals can purchase," Slome declares. "As you age and retire, your income goes down and your medical costs typically rise which means you are far more retired seniors likely to be able to take advantage of this significant tax deduction."
Business owners continue to have certain tax advantages not available to individuals in 2013, Slome explains. Established in 1998 as a non-profit trade group, the California-based American Association for Long Term Care Insurance advocates for the importance of planning for long term care and supports insurance and financial professionals who market LTC insurance. To learn more about long term care insurance costs call the organization’s offices at (818) 597-3227 or visit the Association’s website.