Tax incentives for business owners with LTC insurance

Advisors


Some individuals can write off LTC premiums if they exceed 10 percent of their adjusted gross income because premiums are considered medical expenses. If you are a W2-earning household with $200,000 adjusted gross income, you have to top $20,000 in medical expenses just to begin to write off some of your premiums. This is not a very good tax break.

Business owners and the self-employed, however, have an incredible tax strategy that can make LTC insurance really affordable. We recently ran a quote for LTC insurance for a couple in their 50s that was going to cost $3,450 per year. If they owned their own business, they could write off $3,060 of their premium based on the 2017 limits below.

If this couple is in the 28 percent tax bracket, their policy only costs them $2,593.20 per year instead of $3,450 (3,060 x .28 = 856.80). As they get older, they can deduct even more.



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