amount of ltc premiums that can be deducted
Generally, you can deduct on Schedule A (Form 1040) only the amount of your medical and dental expenses that is more than 10% of your AGI. But if either you or your spouse was born before January 2, 1950, you can deduct the amount of your medical and dental expenses that is more than 7.5% of your AGI. Updated for Tax Year 2014. OVERVIEW. Most self-employed taxpayers can deduct health insurance premiums, including age-based premiums for long-term care coverage. Write-offs are available whether or not you itemize, if you meet the requirements. If you are self-employed, you may be eligible to deduct premiums that you pay for medical, dental and qualifying long-term care insurance coverage for yourself, your spouse and your dependents. This code permits a credit against the individual's income taxes that shall not exceed 15 percent of the amount of long term care insurance premium paid during the taxable year. And, the credit can not be claimed to the extent that the individual has claimed a deduction for federal tax purposes. Deduction-Credit Montana offers both a deduction for entire amount of qualified LTCi premiums covering taxpayer, taxpayer's parents, grandparents & dependents. A tax credit is now allowed for for premiums paid for long term care insurance coverage for a qualifying family member. The amount of the credit shall be based on the taxpayer's adjusted gross income and can not exceed $5,000 per qualifying family member in a taxable year. Last year, you were unmarried, you were born after January 2, 1950, and you had $500 of medical expenses. You cannot deduct the $500 because it is less than 10% of your AGI. If, in a later year, you are reimbursed for any of the $500 of medical expenses, you do not include that amount in your gross income. If you itemize your deductions and do not claim 100% of your self-employed health insurance costs on Form 1040, include any remaining premiums with all other medical expenses on Schedule A (Form 1040), subject to the 10% limit (or 7.5% if either you or your spouse was born before January 2, 1950). 1 If you fit into this category and directly pay your own health insurance premiums, you can claim the page 1 deduction. 2  If the partnership or LLC pays the premiums, special tax reporting rules apply to the partnership’s or LLC’s return, but you can still claim the deduction for premiums paid for your coverage. John properly filed his 2013 income tax return. He died in 2014 with unpaid medical expenses of $1,500 from 2013 and $1,800 in 2014. If the expenses are paid within the 1-year period, his survivor or personal representative can file an amended return for 2013 claiming a deduction based on the $1,500 medical expenses. The $1,800 of medical expenses from 2014 can be included on the decedent's final return for 2014. Deduction A deduction for long term care insurance premiums paid annually ius allowed from gross income provided that the deduction does no exceed $500 per year, per individual. It does not matter whether the individual files joiuntly and the LTC poilicy must meet District of Columbia's definitions. If you qualify, the deduction for self-employed health insurance premiums is a valuable tax break. With the rising cost of health insurance, a tax deduction can help you pay at least a portion of the premium cost. And that will help to keep you healthy—and happy—in 2013 and beyond.
Not exceed $5,000 per qualifying family member in a taxable year.