Sole Proprietor tax Deduction for Long term Care Insurance

Deductibility of Employer-Paid Premiums
Sole Proprietors who purchase and pay for Tax-Qualified Long-Term Care Insurance policies for themselves, their spouses and their tax dependents may claim a deduction for the premiums paid as medical care expenses (IRC Sec. 162(l)(1)(A) and Sec. 213).

Prior to tax year 2003, only a percentage of the eligible Tax-Qualified Long-Term Care Insurance premiums paid by a self-employed individual were deductible as medical care expenses. However in tax year 2003 and thereafter, the full amount of the Tax-Qualified Long-Term Care Insurance premiums paid by the self-employed individual may be deducted (IRC Sec. 162(l)(1)(B). See the following table for more information.

Tax Year	Applicable Percentage of TQ LTCI Premium Deductible as Self-Employed Health Insurance
2012	100%

Further, as in the case of individual taxpayers, the amount of the Tax-Qualified Long-Term Care Insurance premiums that a self-employed individual may deduct as Self-Employed Health Insurance is subject to the following dollar limits.

Age	Eligible Premium 2012 Limit	Eligible Premium 2011 Limit
< 40	$350	$340
41 - 50	$660	$640
51 - 60	$1,310	$1,270
61 - 70	$3,500	$3,390
> 70	$4,370	$4,240

We do not provide tax or legal advice. Any decisions whether to implement these ideas should be made by the client in consultation with professional financial, tax, and legal counsel.

“Not having a plan for extended care will have an impact on your family, health and your best thought out retirement plan.

Living a long life could well be in your future.

Planning for it is now a necessity

Call Les Robinson to help develop a LTC plan 1-800-836-2040 ext 3014

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