The IRS just announced long term care insurance deduction rates for 2012.
The deduction amount for your qualified long term care plan is set each year and is in addition to any state long term care insurance deduction or credit you may be eligible for.
Long term care insurance premiums are tax deductible to the extent that they, along with other unreimbursed medical expenses (including Medicare premiums), exceed 7.5 percent of the insured’s adjusted gross income. This threshold will increase to 10 percent on January 1, 2013, although it will remain at 7.5 percent for taxpayers 65 and older through 2016. The rules are different for the self-employed.
2012 Long Term Care Insurance Deductibility Limits
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| Taxpayer’s Age At End of Tax Year |
2012 Maximum Deduction
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| 40 or Less | $350 |
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| More than 40 but not more than 50 | $660 |
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| More than 50 but not more than 60 | $1,310 |
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| More than 60 but not more than 70 | $3,500 |
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| More than 70 | $4,370 |
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Premium amounts over these limits are not considered to be a medical expense.
