Meaningful tax-savings benefit for small business
November 4, 2013. The Internal Revenue Service (IRS) has just announced increased deductibility levels for long-term care insurance policies purchased in 2014.
“For taxable years beginning in 2014, the limitations have been increased again,” explains Jesse Slome, executive director of the American Association for Long-Term Care Insurance (AALTCI), the industry’s trade association. “Tax advantaged long-term care insurance remains one of the few remaining significant tax-savings benefits especially meaningful for small business owners.”
The deductible limits under Section 213(d)(10) for eligible long-term care premiums includable in the term ‘medical care’ are as follows:
Attained Age Before Close of Taxable Year 2013 Deductibles 2014 Deductibles
- 40 or less $360 $370
- More than 40 but not more than 50 $680 $700
- More than 50 but not more than 60 $1,360 $1,400
- More than 60 but not more than 70 $3,640 $3,720
- More than 70 $4,550 $4,660
Source: IRS Revenue Procedure 2012-41 (2013 limits) and 2013-35 (2014 limits)
For calendar year 2013, the per-diem limitation under Section 7702B(d)(4) for periodic payments received under a qualified long-term care insurance contract is $330 (the 2013 limit was $320).
The American Association for Long-Term Care Insurance is the national association serving insurance and financial professionals who provide long-term care financing solutions. A complete explanation of tax deductible rules for individuals and business owners can be found on the Association’s website: www.aaltci.org/tax.
