Deducting Long-Term-Care Premiums

For most policies, a portion of the premiums counts toward deductible medical expenses.

Is it true that I can deduct my long-term-care insurance premiums on my tax return this spring? Can I write off the entire premium?

If you have a tax-qualified long-term-care insurance policy, you can count a portion of the premium as a tax-deductible medical expense. Medical expenses are deductible to the extent they exceed 10% of your adjusted gross income (or more than 7.5% of AGI if you’re 65 or older). Most long-term-care policies issued in the past several years meet the requirements (ask your insurer about yours). See IRS Publication 502 for more information about eligible long-term-care policies.

The deductible amount is based on your age. If you’re 40 or younger, you can deduct up to $370 of your annual premiums for 2014. You can deduct up to $700 if you’re 41 to 50; up to $1,400 if you’re 51 to 60; up to $3,720 if you’re 61 to 70; and up to $4,660 if you’re 71 or older.

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You can also deduct other medical expenses that aren’t reimbursed by insurance -- see IRS Publication 502, Medical and Dental Expenses, for a full list of eligible expenses. Medical expenses are an itemized deduction on Schedule A.

Kimberly Lankford
Contributing Editor, Kiplinger's Personal Finance

As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.