22 THE QUEENS COURIER • JULY 25, 2019 FOR BREAKING NEWS VISIT WWW.QNS.COM
TAX CODE AND
BY JOHN SAVIGNANO, CPA
Half of all seniors will need long-term care at some point, according to
government estimates. It can be in-home, assisted living or nursing
About one in six will pay $100,000 or more out of their own pockets
for long-term-care services
Luckily the tax code can provide some help for seniors or anyone else
stuck with sizable bills for necessary long-term-care services or support.
Long-term-care costs may be deducted by individuals as itemized
deductions on Schedule A of the return, provided all requirements are
met. They’re treated as medical expenses. Taxpayers can claim the
deduction to the extent their total medical costs exceed 10% of their
adjusted gross income.
The care must be for medically necessary services that are
rehabilitative, diagnostic, preventive, therapeutic, mitigating, curing
treating, for maintenance or for personal care. The cost of meals and
lodging at an assisted living facility or a nursing home also counts if the
main reason you are there is to get medical care.
Only long-term-care costs of chronically ill individuals can be written
off. A person is chronically ill if he or she is unable to perform at least
two activities of daily living without help for at least 90 days. Activities
of daily living include eating, using the toilet, bathing, dressing and the
like. Anyone in need of long-term care because of dementia or another
severe cognitive impairment is also chronically ill because of dementia
or another severe cognitive impairment is also chronically ill if
substantial supervision is needed to protect his or her personal health
and safety. The chronic illness must be certified by a licensed health care
Premiums that one pays for long-term-care insurance are also tax
deductible. But the write-off is capped for each person according to his
or her age. For 2019, taxpayers who are 71 or older can deduct up to
$5,270 per person. Filers age 61 to 70…$4,220. Those who are 51 to 60
can deduct as much as $1,580. Individuals who are 41-50 can take $790.
And people age 40 and younger…$420. For most, long-term-care
premiums are medical expenses, deductible only by itemizers to the
extent total medicals exceed 10% of adjusted gross income. However,
self-employed persons can often deduct long-term-care insurance
premiums as an adjustment to income on Schedule 1 without having to
There are a number of requirements for the insurance policy itself, too.
It can cover only long-term-care services. As a result, you can’t deduct
premiums paid for a “hybrid” policy that combines life insurance with
coverage for long-term care. The policy must be renewable. Any cash
surrender value can’t be paid, assigned, pledged or borrowed. Refunds
and dividends under the policy generally must be used to reduce future
premiums or increase future benefits. The policy can’t pay costs that
would be paid under Medicare, except if Medicare is a secondary payer.
And per diem or other periodic payments without regard to expenses
John Savignano is a partner with Savignano Accountants & Advisors
located at 47-46 Vernon Blvd., Second Floor, in Long Island City. If you
have any questions or require additional information, please call John at
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