Long Term Care Premiums

Long Term Care Premiums

21740696_2096487367043455_3896093829406871573_nThinking of getting a Long Term Care policy?

There is a limit to the amount that can be deducted on your tax return.

For Federal return purposes the limit is based on age and ranges from $410 to $5,110 per person for 2017. This amount gets added to the rest of your Qualified Medical Costs and only the amount in excess of 10% of your Adjusted Gross Income gets deducted and then ONLY IF you are itemizing deductions.

For Ohio return purposes you can deduct the cost of Long Term Care.  It doesn’t need to be over a certain amount and it doesn’t matter if you were able to deduct it on your federal return or not.

Also- the Self Employed Health Insurance deduction includes medical, dental and long term care insurance for you, your spouse and your dependents.

There are also some rules that apply to how the insurance plan is established. Follow these guidelines to make sure the plan qualifies:

  • If you’re self-employed and file Schedule C, C-EZ, or F, the policy can be in your name or in your business’ name.
  • If you’re a partner, the policy can be in your name or the partnership’s name and either of you can pay the premiums. If the policy is in your name and you pay the premiums, the partnership must reimburse you and include the premiums as income on your Schedule K-1.
  • If you’re an S corporation shareholder, the policy can be in your name or the S corporation’s name and either of you can pay the premiums. If the policy is in your name and you pay the premiums, the S corporation must reimburse you and include the premiums as wage income on your Form W-2.

Linda Reinhardt

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