|
BREAKING NEWS!
The 2024 IRS LTC Insurance numbers are out. And, strangely, all the numbers are going DOWN for 2024. Still higher than 2022, but likely a result of the Eligible premiums and Per Diem limit now being calculated as a "chained" CPI - I have no idea how that works, but it's created a see-saw effect on the numbers the last few years. The 2024 "Per Diem" limit - the guaranteed minimum tax-free benefit payment amount for indemnity/cash benefit policies - is going down to $410 per day (from $420/day in 2023). The 2024 age-based medical-expense "Eligible" LTC premiums are dropping slightly for attained ages as of 12/31 in the tax year: Age 40 or less: $470 (down from $480 in 2023) Ages 41 - 50: $880 (down from $880) Ages 51 - 60: $1,760 (down from $1,790) Ages 61 - 70: $4,710 (down from $4,770) Ages 71+: $5,880 (down from $5,960) CLICK HERE to link to to Revenue Procedure 2023-34 - see Sections 28. & 62. Want more information about LTC insurance tax issues? Please click here to visit our Tax Guide in the LTC Learning Center.
0 Comments
As we enter Medicare open enrollment season remember: Medicare NEVER pays for LONG-term care! It may pay for SHORT-term care, but only IF it is skilled & rehabilitative.
Medicare - in any form or with a supplement - should NEVER be relied on as a funding source for true, long-term, custodial, extended care needs! 100-days in a nursing home is still SHORT-term care! (And Medicare only pays about 21 days on average - 100 days are the MAXIMUM possible, but not guaranteed.) For home HEALTH care (requiring skilled/rehabilitative services), Medicare only covers ONE-hour "visits" and no more than about 3 times per week! The practical limit is just one or two months. Medicare is health insurance, NOT long-term care coverage. Just like during working years health insurance does not provide disability income replacement! Absolutely, review your Medicare coverage options this open enrollment season! But if you don't have a plan for long-term, custodial, extended care, let me know, I'd love to help you design and implement LTC insurance coverage for you! CLICK HERE to contact me for more information or to request a LTC insurance quote. IRS has released its annual inflation adjustments for tax year 2023. (Revenue Procedure 2022-38)
This includes the amount of LTC insurance premiums which are considered deductible health insurance premiums (the "Eligible Premium") and the tax-free benefit amount for "cash benefit" indemnity plan payments - what the IRS calls "per diem" plans. FOR CLAIMS IN 2023 with a "cash benefit" or indemnity (per diem) policy the minimum tax-free benefit increases to $420 per day ($12,775/month). (This is a $30/day increase from 2022 which was $390/day.)
FOR PREMIUMS PAID IN 2023 the amount of tax-qualified premiums paid based on your age at the end of the tax year (on 12/31/2023) are considered a deductible medical expense up to the following age-based, "Eligible Premium" limits: Age at end of 2023 Maximum Deductible Premium 40 or younger $480 41 to 50 $890 51 to 60 $1,790 61 to 70 $4,770 71 or older $5,960 NOTE that most taxpayers will not be able to realize any deduction as you must first be able to itemize deductions on Schedule A, have total un-reimbursed medical expenses including the LTC Eligible Premium that exceed 7.5% of your Adjusted Gross Income (AGI), and only the amount above the 7.5% threshold is deductible. HOWEVER, if you have funds in a Health Savings Account (HSA) - or an employer-funded Health Reimbursement Account (HRA) - you CAN use those tax-free dollars to pay tax-qualified LTC insurance premiums UP TO the age-based, Eligible Premium amount shown above for yourself and a spouse. BUSINESS OWNERS (and spouses) get to take the age-based, Eligible Premium deduction "above-the-line" on Form 1040, as part of the "Self Employed Health Insurance Deduction" (Form 1040, Schedule 1, Line 16). This applies to owners of business incorporated or taxes as: Sole Proprietorships, Partnerships, or S-Corporations. (Shareholder/Employees of a "regular" C-Corporation can have the entire premium deducted - without limit - if paid as an employee benefit by the corporation.) CLICK HERE TO LEARN MORE ABOUT BUSINESS DEDUCTIONS FOR LTCI AND TO SEE THE 2022 LTC TAX GUIDELINES FOR 2022 TAX RETURNS AND AS COMPARED TO THE NEW NUMBERS FOR 2023. * The tax information presented here is for general information only and should not be used nor relied upon as specific tax advice. Taxpayers should consult with their CPA or qualified tax professional for advice regarding their own tax situation and the tax status of LTC premiums and benefits. The IRS has released its annual inflation adjustments for tax year 2022. (Revenue Procedure 2021-45)
This includes the amount of LTC insurance premiums which are considered deductible health insurance premiums (the "Eligible Premium") and the tax-free benefit amount for "cash benefit" indemnity plan payments - what the IRS calls "per diem" plans. FOR CLAIMS IN 2022 with a "cash benefit" or indemnity (per diem) policy the minimum tax-free benefit DECREASES to $390 per day ($11,862/month). (This is a $10/day DECREASE from 2021 which was $400/day.)
FOR PREMIUMS PAID IN 2022 the amount of tax-qualified premiums paid based on your age at the end of the tax year (on 12/31/2022) are considered a deductible medical expense up to the following age-based, "Eligible Premium" limits: Age at end of 2022 Maximum Deductible Premium 40 or younger $450 41 to 50 $850 51 to 60 $1,690 61 to 70 $4,510 71 or older $5,640 NOTE that most taxpayers will not be able to realize any deduction as you must first be able to itemize deductions on Schedule A, have total un-reimbursed medical expenses including the LTC Eligible Premium that exceed 7.5% of your Adjusted Gross Income (AGI), and only the amount above the 7.5% threshold is deductible. HOWEVER, if you have funds in a Health Savings Account (HSA) - or an employer-funded Health Reimbursement Account (HRA) - you CAN use those tax-free dollars to pay tax-qualified LTC insurance premiums UP TO the age-based, Eligible Premium amount shown above for yourself and a spouse. BUSINESS OWNERS (and spouses) get to take the age-based, Eligible Premium deduction "above-the-line" on Form 1040, as part of the "Self Employed Health Insurance Deduction" (Form 1040, Schedule 1, Line 16). This applies to owners of business incorporated or taxes as: Sole Proprietorships, Partnerships, or S-Corporations. (Shareholder/Employees of a "regular" C-Corporation can have the entire premium deducted - without limit - if paid as an employee benefit by the corporation.) CLICK HERE TO LEARN MORE ABOUT BUSINESS DEDUCTIONS FOR LTCI AND TO SEE THE 2021 LTC TAX GUIDELINES FOR 2021 TAX RETURNS AND AS COMPARED TO THE NEW NUMBERS FOR 2022. * The tax information presented here is for general information only and should not be used nor relied upon as specific tax advice. Taxpayers should consult with their CPA or qualified tax professional for advice regarding their own tax situation and the tax status of LTC premiums and benefits. "LTC Insurance: First, You Should Find an Agent"As part of its WealthAdvisor section, the Wall Street Journal published a column today featuring LTC specialist Bill Comfort's advice for how to find an independent, qualified LTC insurance specialist. CLICK HERE to link to the article - it may require a subscription to read the full article. From the article: "Long-term-care insurance, as you’re probably aware, is a ridiculously complicated product, one that comes in many shapes and sizes. As such, an independent agent—one who sells policies from multiple carriers and who specializes in long-term-care planning and insurance—can help you navigate these waters. "What you don’t want, says Bill Comfort, a long-term-care insurance specialist in Durham, N.C., is someone who jumps immediately into policy features and premiums. Rather, you’re looking for an adviser who, first, takes time to understand your situation and needs and, second, can explain how various types of coverage might help." That's us!CLICK HERE to Read our
|
Age at end of 2021 |
Maximum Deductible Premium |
40 or younger |
$450 |
41 to 50 |
$850 |
51 to 60 |
$1,690 |
61 to 70 |
$4,520 |
71 or older |
$5,640 |
NOTE that most taxpayers will not be able to realize any deduction as you must first be able to itemize deductions on Schedule A, have total un-reimbursed medical expenses including the LTC Eligible Premium that exceed 10% of your Adjusted Gross Income (AGI), and only the amount above the 10% threshold is deductible.
HOWEVER, if you have funds in a Health Savings Account (HSA) - or an employer-funded Health Reimbursement Account (HRA) - you CAN use those tax-free dollars to pay tax-qualified LTC insurance premiums up to the age-based, Eligible Premium amount shown above for yourself and a spouse.
BUSINESS OWNERS (and spouses) get to take the age-based, Eligible Premium deduction "above-the-line" on Form 1040, as part of the "Self Employed Health Insurance Deduction" (Form 1040, Schedule 1, Line 16). This applies to owners of business incorporated or taxes as: Sole Proprietorships, Partnerships, or S-Corporations. (Shareholder/Employees of a "regular" C-Corporation can have the entire premium deducted - without limit - if paid as an employee benefit by the corporation.)
CLICK HERE TO LEARN MORE ABOUT BUSINESS DEDUCTIONS FOR LTCI AND TO SEE THE 2020 LTC TAX GUIDELIENS COMPARED TO 2021.
HOWEVER, if you have funds in a Health Savings Account (HSA) - or an employer-funded Health Reimbursement Account (HRA) - you CAN use those tax-free dollars to pay tax-qualified LTC insurance premiums up to the age-based, Eligible Premium amount shown above for yourself and a spouse.
BUSINESS OWNERS (and spouses) get to take the age-based, Eligible Premium deduction "above-the-line" on Form 1040, as part of the "Self Employed Health Insurance Deduction" (Form 1040, Schedule 1, Line 16). This applies to owners of business incorporated or taxes as: Sole Proprietorships, Partnerships, or S-Corporations. (Shareholder/Employees of a "regular" C-Corporation can have the entire premium deducted - without limit - if paid as an employee benefit by the corporation.)
CLICK HERE TO LEARN MORE ABOUT BUSINESS DEDUCTIONS FOR LTCI AND TO SEE THE 2020 LTC TAX GUIDELIENS COMPARED TO 2021.
* The tax information presented here is for general information only and should not be used nor relied upon as specific tax advice. Taxpayers should consult with their CPA or qualified tax professional for advice regarding their own tax situation and the tax status of LTC premiums and benefits.
"Chronic Illness" riders on life insurance are NOT the same as real LTC insurance. There is an explosion of these "living benefit" riders being added to life insurance policies with NO standardization as to what "Chronic Illness" means or how the benefits get paid.
Some of these "Chronic Illness" riders may look a lot like real LTC insurance - an agent may even tell you, "It's just the same as LTC insurance." But it is not.
If you're goal is planning for extended, long-term care needs and an agent only shows you one of these riders you must find another agent!
Some of these "Chronic Illness" riders may look a lot like real LTC insurance - an agent may even tell you, "It's just the same as LTC insurance." But it is not.
If you're goal is planning for extended, long-term care needs and an agent only shows you one of these riders you must find another agent!
CLICK HERE to read an outstanding article on some of the problems with "Chronic Illness" riders by my colleague, Kerry Peabody.
"If you need a plan to pay for LTC, you’re better off with a policy specifically designed to do that. When you’re actually planning to meet your LTC needs, a Chronic Illness rider isn’t a plan, it’s an afterthought."
- Kerry Peabody
Request a copy of our updated 2020 Consumer Guide to LTC Insurance
The Hybrid LTC Information Center
ComfortLTC.com has added a new resource for consumers and financial advisors regarding "hybrid" or "linked-benefit" LTC insurance. Articles include:
As a truly independent brokerage agency specializing in extended care planning and LTC insurance, Comfort LTC fairly represents ALL types of LTC insurance - Traditional LTC and all the many different Hybrid LTC variations.
Do not ever buy LTC insurance from an agent or advisor who only sells one type of coverage (or represents only one or two companies) - they cannot represent your best interests. CLICK HERE for our guide to finding a truly independent LTC specialist.
Do not ever buy LTC insurance from an agent or advisor who only sells one type of coverage (or represents only one or two companies) - they cannot represent your best interests. CLICK HERE for our guide to finding a truly independent LTC specialist.
Scroll down
for older posts
for older posts
Author
Bill Comfort
CSA, CLTC, LTCCP
The LTCpro®
Categories
All
Alzheimer's
Caregiving
Commentary
LTC Insurance
LTC Planning
LTC Tax Planning
Medicare
News
Rate Increases
Video
Archives
November 2023
October 2022
December 2021
February 2021
December 2020
October 2020
August 2020
June 2020
May 2020
April 2020
March 2020
January 2020
November 2019
September 2019
May 2019
March 2019
February 2019
October 2018
August 2018
March 2018
January 2018
August 2017
July 2017
March 2017
February 2017
November 2016
October 2016
August 2016
July 2016
June 2016
May 2016
April 2016
January 2016
November 2015
October 2015
August 2015
May 2015
April 2015
March 2015
February 2015
January 2015
December 2014
November 2014
RSS Feed
