Taxes and Long Term Care
Long term care expenses can wipe out a person’s savings and investments. That’s why it is important to consider long term care insurance. It can be a serious issue for those who find themselves in a situation where it is needed. Nearly 70% of Americans 65 and older need long term care at some point.
About one in four LTC claims are attributed to Alzheimer’s disease. Other claims are attributed to physical issues ranging from chronic illnesses to injuries and disabilities.
Long term care insurance is one of the most complex types of insurance you may consider purchasing, and you should consider talking to your financial advisor to walk you through the various aspects of it. The average nursing home stay is 2.3 years, costing $183,700. A private room is $7500 per month.
Here are some tax benefits you might not have known:
Premiums may be deductible. It’s not as simple as just writing off the amount you pay each year. There are nuances to this allowance, including your age and how much money was spent on health care in the same year.
Benefits (money paid out) are, in almost all cases, exempt from taxes.
Payments of your premiums, unlike regular health insurance, can be made from a Health Savings Account (HSA). This effectively gives you a tax deduction on your premiums.
While the tax benefits of long term care insurance are nice, whether it's deductible to you or not should not be the decision point. The bottom line is that everyone should have coverage to guard against long term care expenses, which have the potential to be financially crippling.
Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.
To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law.
Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.
These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable-- we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.
David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances. Member FINRA & SIPC
Founded in 1976, David Lerner Associates is a privately-held broker/dealer with headquarters in Syosset, New York and branch offices in Westport, CT; Boca Raton, FL; Teaneck and Princeton, NJ; and White Plains, NY. For more information contact David Lerner Associates Call 516-921-4200 Visit our website: www.davidlerner.com