The Wall Street Journal
Investing Basics – November 25, 2012
New, Higher Hurdle to Deduct Care Costs
By Carolyn T. Geer
The squeeze is on for folks who rely on the tax code for relief from big medical bills. Starting next year, taxpayers will only be able to deduct medical expenses that exceed 10% of their adjusted gross income.
For years that threshold has stood at an already formidable 7.5% of income. (People age 65 and older can keep using the old threshold through 2016.) The change affects taxpayers who itemize deductions on Schedule A of the 1040 form instead of taking the standard deduction.
Comments November 25, 2012
Fortunately, long term care insurance premiums have been and will continue to be a qualified deduction for an individual taxpayer, their spouse and their dependents based on caps for various age brackets. The amount of premium that can be deducted will once again increase in 2013. Unfortunately, long term care insurance premiums deductions will be affected by the new tax laws.
Business owners; including sole proprietors, S corporations, LLCs and C corporations do not have to worry about the higher hurdle. They will not be affected, as they can deduct long term care insurance premiums as a business expense based on caps for various age brackets. Note: these caps do not apply to C corporations.
Let us research the market and design a long term care solution to meet your needs and budget at:
Aaron Skloff, AIF, CFA, MBA
CEO – Skloff Financial Group
Aaron Skloff, Accredited Investment Fiduciary (AIF), Chartered Financial Analyst (CFA), Master of Business Administration (MBA), is the Chief Executive Officer of Skloff Financial Group, a Registered Investment Advisory firm. The firm specializes in financial planning and investment management services for high net worth individuals and benefits for small to middle sized companies. He can be contacted at www.skloff.com or 908-464-3060.