But Slome says the deductions can be valuable for people in their seventies and older. As a result, only premiums exceeding the 7.5 of AGI threshold are deductible. These deductions are typically not useful for people in their fifties or sixties. Like the deduction for long-term-care services, this is an itemized deduction for medical expenses. (For those 41 to 50, it’s $850, and for 40 or younger, it’s $450.) Impact Increases With Age This limitation means the deduction “only applies to traditional long-term-care policies”-not “hybrid” policies that combine life insurance with long-term-care benefits, says Jesse Slome, executive director of the American Association for Long-Term Care Insurance. For instance, it can only cover long-term-care services.
The insurance policy itself must also meet certain requirements for the premiums to be deductible. (The self-employed may be able to deduct premiums paid for long-term-care insurance as an adjustment to income without having to itemize.) As a result, only premiums exceeding the 7.5% of AGI threshold are deductible. Like the deduction for long-term-care services, this is an itemized deduction for medical expenses. The tax code also permits a limited deduction for certain long-term-care insurance premiums.
13 States That Tax Social Security Benefits
