The Internal Revenue Service (IRS) has announced increased deductibility levels for long-term care insurance policies purchased in 2008. Millions of small and mid-sized business owners are still unaware that the cost of long-term care insurance protection for themselves and their spouse may be fully tax deductible.
Tax advantaged long-term care insurance is one of the few remaining significant tax-savings benefits for owners and self-employed individuals. Discounts for small groups are increasingly available for businesses, even those with 10 or fewer employees.
There is still time to take advantage of tax deductions in 2007 and also benefit from the increased deductible limits next year. In addition to the federal tax deduction, many states now offer tax incentives for individuals purchasing tax-qualified long-term care coverage.
The deductible limits under Section 213(d)(10) for eligible long-term care premiums includable in the term ‘medical care’ are as follows:
Source: IRS Revenue Procedure 2006-53 (2007 limits) and 2007-66 (2008 limits)
Jesse Slome is the executive director of the American Association for Long-Term Care Insurance.