On behalf of Kundra & Associates PC posted in back taxes or tax debt on Thursday, April 13, 2017.
If there's one thing about tax season that everyone can agree upon, it brings out the saver in everyone. Who wouldn't want to use every way legally possible to figure out how to reduce one's taxable income in order to get a refund check? Income tax refunds are especially important for the elderly. If you think about it, the refund is probably likely the largest individual check they will receive in 2017.
Premiums on long term care (LTC) insurance premiums may be tax deductible. The actual savings follows a detailed formula, but premium costs are generally deductible if they exceed a certain percentage of a taxpayer's adjusted gross income (AGI) depending on the person's age.
For instance, taxpayers aged 70 and older may deduct up to $4,870 in premiums for the 2016 tax year. Taxpayers age 60 to 70 may deduct $3,900 for the same period. Those between age 50 and 60 may deduct $1,460 and taxpayers younger than 50 may deduct $730. Finally, taxpayers younger than 40 may only deduct $390.
Finding the allowable deductible follows a complicated formula where LTC premiums are compared to the total of all other medical expenses. A skilled lawyer can make sense of all the complicated calculations and ensure that federal taxation rules are followed For those who are not used to using computer programs to calculate expenses and deductions, having the guidance of an experienced tax law attorney can be beneficial.
After all, receiving an income tax refund check, as opposed to owing Uncle Sam some money, would justify cost of having a lawyer.