HEALTH SAVINGS ACCOUNT
Can I purchase with proceeds from my Health Savings Account?
Health savings accounts (HSAs) are like personal savings accounts, but the money in them is used to pay for health care expenses. You — not your employer or insurance company — own and control the money in your health savings account. The money you deposit into the account is not taxed. When you purchase a qualified Long Term Care Insurance policy you may pay all or part of your premiums with pre-tax dollars with a Health Savings Account. Consult your tax profession for complete regulations before purchasing a LTC policy if you are planning to use an HSA. You can start an health savings account on your own through a bank or other financial institution, but in general you must be under the age of 65, although there are exceptions.
Is Long Term Care insurance Tax Deducatable?
Premiums for “qualified” long-term care insurance policies are tax deductible to the extent that they, along with other unreimbursed medical expenses, exceed a certain percentage of the insured’s adjusted gross income.
These premiums — what the policyholder pays the insurance company to keep the policy in force — are deductible for the taxpayer, his or her spouse and other dependents as long as they exceed 10 percent. For taxpayers 65 and older, this threshold will be 7.5 percent through 2016.
Business and Self-Employed?
Those who are self-employed can take the amount of the premium as a deduction as long as they made a net profit and their medical expenses do not have to exceed a certain percentage of their income. However, if you have “passive” real estate income and are not paying self-employment tax you cannot deduct your premiums as a business, but can as an individual.
Be sure and obtain the current IRS Publication 502 that will have instructions for filling out IRS form 502. This publication will give you the current medical expense amounts you can deduct with a Health Saving Account.
For example, a person who is more than 60 years old but not more than 70 years old may deduct $3800 in 2015. This amount is usually more than most Long Term Care policies cost at that age span.
Your LTC policy must be tax qualified and not be deducted elsewhere. Discuss the possibility of a Health Saving Account with your tax professional, as establishing such an account can be a financially smart decision.
Rest assured, that all of the policies that LTC USA offers are IRS tax qualified Long Term Care Insurance policies. Click on the button below to receive all the information in the comfort of your own home and at your own pace, without having to attend a sales meeting with a local “hard sell” Insurance agent.
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