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2013 tax deductions for LTC premiums

10-19-2012- Taxpayers will be able to increase the amount they deduct on their federal taxes for long-term care premiums in 2013. To qualify for the deduction, certain conditions must be met: 

The policy must be "qualified." If issued after Jan. 1, 1997, the policy must be in compliance with the regulations established by the National Association of Insurance Commissioners, and offer inflation and nonforfeiture protection (whether or not the insured party chooses those options).  Additionally, the policy must contain certain 'triggers' under which benefits can be paid. The insured individual may be able to collect benefits only when he/she requires assistance with two of six "activities of daily living" for at least 90 days; or when a physician certifies that there is cognitive impairment to warrant supervision for safety purposes. Any policy purchased before Jan. 1, 1997 will be grandfathered in and treated as qualified so long as it has been approved by the insurance commissioner of the state in which it was sold. 

Beginning Jan. 1, 2013, the premiums, plus unreimbursed medical expenses, must exceed 10% of gross income for those under age 65 in order to be deductible; for those over 65, the threshold will remain at 7.5% through the year 2016.. (The rules are slightly different if you're self-employed; check with your accountant,)

Here are the IRS' deductibility guidelines for 2013. The figures are based on the attained age of the taxpayer before the end of the taxable year: 

40 years or younger: $360 (was $350)
41 - 50: $680 (was $660)
51 - 60: $1360(was $1310)
61 - 70: $3640 (was $3500)
71 and older: $4550 (was $4370)

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