Many people are focused on taxes these days. Yes, people are getting ready to file for federal, and in many cases, state income tax returns. You hear many proposals from politicians about tax increases on one end to proposals for additional tax cuts on the other end. But if you are planning for a hopefully successful future retirement you may be missing an important tax incentive available to you right now.
"More people today are aware of the financial costs and burdens that come with aging. They see their parents, grandparents, perhaps aunts and uncles needing help with normal living activities. In many cases, they even need supervision due to memory loss from dementia. To prepare for the impact of getting older, people are purchasing, or have already purchased, affordable Long-Term Care insurance policies. They certainly help safeguard savings but they do more than that. They also reduce the stress and burden that otherwise is placed on adult children. One thing some people forget are the tax benefits of having Long-Term Care Insurance," said Matt McCann, a nationally known expert on long-term care planning and Long-Term Care Insurance.
McCann, speaking to insurance and financial professionals in Atlanta, explained the many benefits in addition to the obvious, the ability to pay for quality care when you need it due to illness, accidents or the impact of aging.
"Federal tax incentives exist for a number of people. While Georgia does not have any state tax deductions available, some states do offer tax incentives. These tax benefits make what is already very affordable even more valuable," McCann said.
Qualified Long-Term Care Insurance provides a number of tax benefits. These include:
- Tax free benefits at the time of claim
- Premiums can be deducted if you itemize as a medical deduction
- For those who own a business (C corporation, S corporation, LLC or if you are just an individual proprietor) your Long-Term Care insurance premiums can be a deductible business expense for you and a spouse
McCann said for those who have a Health Savings Account an individual can use the pre-tax money in that account to pay for the premium.
Individuals should always seek the advice of a qualified tax professional for details. McCann said his website does have comprehensive information you can take to your tax professional: https://mccannltc.net/resources/tax-benefits
These policies are paying huge benefits for American families. In 2018, the major companies paid over $10.3 Billion in claims helping families deal with the physical, emotional and financial costs that come with a long-term care event.
McCann said people require long-term care services and supports due to illnesses, accidents or the impact of just getting older. Health insurance and for those 65 and older, Medicare and Medicare Supplements, will only pay for a limited amount of skilled services. Most long-term care services are custodial in nature. These costs will come out of savings without a Long-Term Care policy.
He says the cost of care can drain even large amounts of assets. Either your family will be caregivers or you will use large portions of savings to pay for care … or even both. Long-Term Care Insurance becomes an easy and affordable solution for many American families.
"Today's Long-Term Care Insurance provides consumers with solid asset protection, professional case management and other benefits to safeguard savings and reduce the burdens of aging placed on a spouse or other family members. Today's plans also provide affordable and rate stable premiums to give the consumer and their family additional peace-of-mind," McCann added.
McCann urged consumers to seek the assistance of an experienced Long-Term Care Insurance specialist. He noted most financial advisors and general insurance agents have limited knowledge of the complexities of these plans, the differences between all the major insurance companies, underwriting criteria used by each company, benefits of the federal Long-Term Care Partnership plan which 45 states are part of and the many options, including "hybrid" plans which are available.
He suggests starting your online research by finding the current cost of long-term care services in your state, along with the availability of partnership benefits and state tax incentives, by visiting the LTC NEWS website resource - https://www.ltcnews.com/resources/state-information
"If you have Long-Term Care Insurance, congratulations. Be sure to take advantage of any tax incentives that may be available to you. If you don't yet have a plan in place to deal with longevity then you better start seeking a solution before you retire when you have the most affordable options available. Long-Term Care Insurance is easy, affordable and rate stable income and asset protection. It provides American families the time to be family instead of dealing with crisis management," McCann said.