Money paid to purchase long-term care (LTC) insurance may be federally tax-deductible. For each age bracket, there is a maximum deduction, which increases annually. In 2007, these are the maximum amounts:
* 40 or younger $290
* 41 to 50 $550
* 51 to 60 $1,110
* 61 to 70 $2,950
*71 or older $3,680
When you file your federal income tax return, you can include the LTC insurance premiums you paid for the year, up to the maximum for your age bracket. Those premiums are added to your other medical expenses.
If the total of your medical expenses exceed 7.5 percent of your income, you can deduct the excess. If you are subject to the alternative minimum tax, medical expenses are deductible to the extent they exceed 10 percent of your income.
