The Internal Revenue Service (IRS) recently announced a 3 percent increase in deductibility levels for long-term care (LTC) insurance policies purchased in 2010. "For the first time, the maximum deductible limit for an individual exceeds $4,000," said Jesse Slome, executive director of the American Association for Long-Term Care Insurance (AALTCI), the industry organization serving insurance and financial professionals. Slome applauded the move as a signal that the federal government — as well as more and more states — are recognizing that individuals need to make provisions for long-term care. He predicts that the raised deduction limits would make long-term care insurance more attractive to many Americans. With the end of the 2009 tax year nearing, consumers may consider taking full advantage of tax-saving incentives for LTC coverage. Consumers can still garner tax deductions in 2009 and can also benefit from the increased deduction limits for next year. The deduction limits under IRS Section 213(d)(10) for eligible long-term care insurance premiums are as follows. Age Before Close of Taxable Year | 2009 Deduction Limits | 2010 Deduction Limits | 40 or under | $320 | $330 | Over 40 but not more than 50 | $600 | $620 | Over 50 but not more than 60 | $1,190 | $1,230 | Over 60 but not more than 70 | $3,180 | $3,290 | Over 70 | $3,980 | $4,110 | Source: AALTCI, IRS Revenue Procedure 2008-66 (2009 limits) and 2009-50 (2010 limits) | The American Association for Long-Term Care Insurance's Web site offers a complete explanation of tax deduction rules for individuals and business owners. About the author: Tes M. Kurtz is a freelance business copywriter. Her previous experience includes technical and marketing writing for software companies. These companies developed various products, including wholesale distribution software, collaborative accountability applications (CAA), and solutions for application security, business system quality, compliance, outsourcing, and language applications quality. She has been writing professionally for 12 years. Tes has a Bachelor of Arts degree in Advertising with an emphasis in English from the University of North Dakota. |
