You can take a tax deduction for your health insurance as long as it is in your name or your company name if you are self-employed. If your coverage under a different name such as your spouse or your spouse’s employer you are not able to take the deduction because it is already being claimed by them. This also includes long term care insurance. If you are self employed long term care insurance premiums can reduce your gross income and could significantly reduce your tax liability depending on your tax bracket. This is referred to an “above the line” deduction whereby it offsets your overall income.
As with health insurance you can deduct long term care insurance premiums paid for yourself and your spouse if you purchase it under the same policy. If your business has shown a net profit in the precious few years and you have been buying long term care insurance you can amend your previous tax returns to reduce your net income and expect a tax rebate check. You can emend your tax returns as far back as 2008.
If your states tax liability is determined according to your federal 1040 form, then you might also want to amend your state tax returns too if you think you can qualify for any returns. If you consult with an accountant its wise to determine if your refund will cover your accountants fees.
If you decide to amend your taxes without consulting an accountant its recommended that you refer to the IRS website to determine if your medical and healthcare deductions include your insurance premiums that you paid for. Different rules apply for employees covered under their employers long term care insurance group policy, and for individuals, as well as self employed. Additionally medical expenses can be classified differently too.
Additionally for small business owners may be able to deduct their employees long term care insurance premiums from their company’s gross income. This however should be confirmed with your accountant so that it is done correctly. Along with that and employer might want to revisit their previous years tax returns to make sure they took advantage of any deductions with their health and long term care insurance policy tax deduction limits for themselves, their family, and their employees.
