The Advisor's View of Long-Term Care Planning

2014 LTC increased tax deductions for LTC Insurance announced

Posted by LTCI Partners | Jul 17, 2014 4:27:00 PM

For 2014, the LTCi tax deduction limitations have been increased. The limits are different among Americans based on their age, according to the IRS Revenue Procedure. The changes to the limits in deductions for LTCi fall under Section 213(d)(10) under the term for medical care, and are based on the attained age of the taxpayer before the close of that taxation year.

These limits can also be applied to the amount of premium that can be paid or reimbursed with the pre-tax dollars of a Health Savings Account (HSA). An HSA is a tax-advantaged medical savings account available to many taxpayers who are enrolled in a high-deductible health plan (HDHP). The funds contributed to an HSA, within the allowed contribution limits, are not subject to federal income tax at the time of deposit.

IRS 2014 limits*  (IRS Revenue Procedure 2012-41 (2013 limits) and 2013-35 (2014 limits))

2014Tax Limits 

In addition, the per-diem limitation under Section 7702B(d)(4) for periodic payments received under a qualified Long Term Care insurance contract have been increased for 2014 to $330 (the 2013 limit is $320).

When planning for LTC, these tax considerations can help make LTC Insurance more affordable.

 

Written by LTCI Partners

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