Estimated tax tip savings. Tax law gives you three types of deductions for long-term care insurance. Choose the right strategy to add thousands of dollars in maximum tax savings.
You may not have put much thought into long-term care insurance—but you should. Chronic illness and disability are real possibilities. Consider this:
Seventy percent of people turning age 65 can expect to use some form of long-term care during their lives.
Between ages 40 and 50, on average, 8 percent of people have a disability that could require long-term care services.
And disability care bears a heavy price tag. According to the U.S. Department of Health and Human Services, the average cost of a private room in a nursing home in 2010 was $6,965 per month. What’s worse: Medicare covers very few of these costs, and Medicaid covers only individuals with low income and few assets.
But there’s a great way to protect yourself: buy long-term care insurance, follow the correct tax deduction strategy, and deduct a portion or all of the premiums.
Your deduction strategy will depend on the type of business you operate. One type of business entity far outshines the others in terms of the tax break you get, but no matter how you operate your business, you can maximize your tax savings if you ... Log in to view full article.