Is The Cost Of Long Term Care Insurance Tax Deductible?

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   William Bridgers

   Specialist, LTCi, DI, Annuities, Life, Designs In Life, LLC, Utah

   Could be.  Since I am not a certified accountant, I cannot give tax advice but here are the parameters for possible tax-advantaged treatment to discuss with a tax professional: 1. Every year the IRS publishes the formula of percentage of premium by age that can be used for favorable tax treatment on the 1040 tax return.  This formula is updated on various tax preparation software programs every year and certainly qualified tax advisors know what it is.  It is also public information that can be obtained at various websites.2.  If the premium causes one to exceed the minimum percentage of health care costs on Schedule A, that amount above the minimum percentage could be deductible.3.  If one is a business owner, the above mention formula may be used on Schedule C to determine the deduction allowable as an amount paid for health insurance premiums.4.  C-corps may be able to ignore the IRS formula and deduct 100% of the long-term care insurance premium on Schedule C.There may be other situations in which the payment of LTCi premium is treated in a tax-favorable manner. This is a topic for discussion with a qualified tax advisor before a consumer should make any assumptions about the tax treatment of the payment of long-term care insurance premiums.

   Answered on June 19, 2013

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