Let Uncle Sam Help Buy Your Long Term Care Insurance

For many Americans, the sound of “Happy New Year!” means it’s time to start thinking about taxes. As the tax forms and wage statements roll in, folks will be looking for new ways to garner deductions that can save their money from the clutches of Uncle Sam. And, many aren't aware of a deduction that could save them money on taxes and help them take a critical step toward preparing for a peaceful and secure retirement. As a recent Forbes article put it:

“Accountants will say you ought to contribute to a 401(k) retirement plan, or buy an SUV [to snag a tax break] but they don’t often bring up the fact that you can buy long-term care insurance through your business and get a tax deduction.”
And, as the American population ages and many of us think about growing older and retiring, the need for Long Term Care Insurance becomes more urgent. But, what is it and why do you need it?

Long Term Care Insurance covers services in the area of so-called long-term care services which include non-medical care such as assistance with bathing, eating, getting around and other activities of daily living. These services can be administered in a nursing home, which is often the most-expensive option, or in an assisted living facility or even in the home. These services are “non-medical” which means that regular health insurance won’t cover them, a fact that many Americans aren't aware of. In addition, Medicare doesn’t routinely cover these services either and Medicaid only if you qualify which can be difficult without exhausting your precious assets. So, many Americans find themselves out of luck when it comes to paying for this type of care, the need for which often arises at a time when you can least manage it due to illness or injury.

The tax break offered by the Federal Government for the purchase of a Long Term Care Insurance policy is quite generous. A single, self-employed person in their 50's can pay as much as around $3,000 per year in premiums, depending on which State they live, all of which is tax deductible. That’s right, 100% deductible which is like getting a 30% discount on the policy! This means that you can spend more on a policy that has better coverage, more options and longer benefit periods, among other choices, while essentially paying the same amount due to the 30% discount via the Federal tax deduction for purchase of Long Term Care Insurance policy.

Not everyone can qualify for this deduction so you’ll want to consult a qualified professional to help you navigate the options in Long Term Care Insurance policies. At LTC Tree, We’ve helped thousands of Americans make sound decisions for their future, long term care needs. We can help you as well. So, reward yourself in this new year with a tax break and smart move toward a secure retirement by purchasing a Long Term Care Insurance policy.