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October 31, 2014 at 10:23 AM
The Internal Revenue Service (IRS) is increasing long-term care insurance (LTCI) deductibility for taxpayers in some age groups as much in 2015 as it did in 2014.
For other consumers, the size of LTCI deductibility increases will slow.
The IRS announced the new 2015 LTCI deduction limits in IRS Revenue Procedure 2014-61. The IRS included the new LTCI limits in a document that also sets other 2015 deduction limits, such as the overall limit on itemized deductions and the dollar limitation on employee contributions to health flexible spending arrangements (FSAs).
Section 213(d)(10) of the Internal Revenue Code (IRC) lets most taxpayers list a portion of their LTCI premiums with other medical expenses, if they have enough medical expenses to deduct those expenses.
Self-employed people can deduct all LTCI premiums up to the deductibility limit, even if they do not have enough medical bills to itemize medical expenses. That makes the LTCI tax break “especially meaningful for small business owners,” according to Jesse Slome, executive director of the American Association for Long-Term Care Insurance (AALTCI).
