By Long-term care costs can be substantial, and neither Medicare nor Medicaid provide comprehensive coverage for most people. Long-term care insurance can help protect your finances, and there may be ways to deduct the premiums, depending on your business structure.
Here are four key points to consider:
- C corporations can provide long-term care insurance as a fully deductible, tax-free benefit to owners.
- Sole proprietors or single-member LLCs with a spouse as the only employee may be able to deduct 100 percent of the premiums through a Section 105-HRA plan.
- S corporation owners, partners, and other sole proprietors may be able to deduct premiums subject to age-based limits.
- If you don’t qualify for business-related deductions, you might deduct premiums as itemized deductions subject to age-based limits and the 7.5 percent floor.
If you want to discuss long-term care insurance deductions, please call me on my direct line at 408-778-9651.