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.
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.