Jul 27
Don’t Forget Long Term Care Deductions
With April 15 drawing closer, we all start thinking about taxes. Older Americans will be happy to note that deductible amounts for long-term care insurance premiums are going up. The deductions for tax year 2006 are higher than for tax year 2005, and the deductions for tax year 2007 are higher than in 2006.
If you qualify, this is a valuable deduction to take on your tax returns. If you already owned a long-term care insurance policy in 2006, the deductible amounts for that tax year can be as high as $3,530 if you’re 70 or older; $2,830 for people between 60 and 70; $1,060 for people between 50 and 60; and $280 for people 40 and under.
The amounts increase for the 2007 tax year: $3,680 for people 70 and older; $2,950 for people between 60 and 70; $1,110 for people between 50 and 60; $550 for people between 40 and 50; and $290 for people 40 and under. The limits are listed in IRS code section 213(d)(10).
Make sure to consult with a qualified tax preparer and a long term care insurance professional who is abreast of current related legislation.
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