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Clients and the New Higher Deductibility Limits for LTC Insurance
In helping your older clients plan for the new year, remember that even though there is no cost-of-living adjustment (COLA) for Social Security benefits in 2011, the IRS has raised the deductibility limits for long-term care (LTC) policies purchased in 2011.
The premiums you pay for your long-term care insurance are deductible as itemized medical expenses (subject to the 7.5% AGI threshold) based on your age at the end of the year. Individual taxpayers can treat premiums paid for tax-qualified long-term care insurance for themselves, their spouse or any tax dependents (such as parents). The 2011 limits are as follows:
|
Attained Age Before Close of Taxable Year |
2011 Limits |
2010 Limits |
|
Age 40 or less |
$340 |
$330 |
|
More than 40 but not more than 50 |
$640 |
$620 |
|
More than 50 but not more than 60 |
$1,270 |
$1,230 |
|
More than 60 but not more than 70 |
$3,390 |
$3,290 |
|
More than 70 |
$4,240 |
$4,110 |
LTC insurance premiums may be paid from a Health Savings Account (HSA) up to the limits shown above. In addition, a self-employed individual can deduct 100% of his or her out-of-pocket LTC premiums up to the amounts listed above. This is an “above-the-line deduction” and does not require meeting the 7.5% adjusted gross income (AGI) threshold to take the deduction.
In our planning recommendations, we always include the cost of a long-term care policy for the future. The payment of this premium could be a great gift for clients who have parents or other relatives who may benefit from this type of coverage…it’s tax deductible to the donor and provides both the client and the covered individual(s) with peace of mind that their future care has been addressed.
About the Author
Rosanne Rogé, R.W. Roge & Co.
Rosanne joined R.W. Rogé & Company, Inc. in January 1995. A CFP, CSA and RFGSM, she is a graduate of C.W. Post - Long Island University's Certificate Program in Financial Planning and the College for Financial Planning Para-Planner Program.
Ms. Rogé is certified by The Certified Financial Planner Board of Standards to use the professional certifications CFP and Certified Financial Planner. She is also a Certified Senior Advisor (CSA); the Society of Certified Senior Advisors is dedicated to providing continuing education that addresses new developments and research concerning seniors. The Society is also committed to promoting the recognition of Certified Senior Advisors as knowledgeable professionals serving seniors.
Ms. Rogé also holds the title of Registered Financial Gerontologist (RFGSM), which she earned "With Distinction" Honors after successfully completing the Comprehensive Examination for the Registered Financial Gerontologist, given by The American Institute of Financial Gerontology (AIFG), in Philadelphia, Pennsylvania.
Ms. Rogé is a Financial Services affiliate of The National Association of Personal Financial Advisors (NAPFA), the national organization of fee-only planners. Ms. Rogé was elected as an Associate Trustee and a member of the Stewardship Committee of the Jefferson's Ferry Foundation. Jefferson's Ferry is an outstanding life care retirement community on Long Island. Also, Ms. Rogé is a member of the Financial Planning Association (FPA). She previously worked at Cigna Individual Financial Services where for four years she prepared financial plans and analytical projections for Clients. She earned both a Bachelor of Arts (Cum Laude) in Human Relations/Psychology and Associate in Applied Science degrees from Pace University.
In May 2010, Wealth Manager Magazine again named Rosanne Rogé as one of the 50 most influential women in wealth management. Ms. Rogé has held several securities licenses (NASD Series 6, 7 and 63) and is a New York State Life, Accident and Health Insurance licensee. She chairs the Client Services Committee of R. W. Roge & Co. and serves on the Investment Management Committee.
In May 2008, Investment Advisor magazine named Rosanne Rogé as one of the "25 Most Influential People in and around the Financial Services Profession." Her advice is frequently sought after by the press and media. She has been quoted in The Wall Street Journal, Bloomberg Personal Finance Magazine, Investment Advisor Magazine, Fortune Magazine, Newsday and USA Today.
Rosanne is also co-author to the newly released book, The Banker and the Fisherman: Lessons in Life, Happiness and Wealth for the 21st Century.
Rosanne is a native New Yorker and has a passion for dogs, flowers, nature and sailing.
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