Richfield, Minn. (PRWEB) March 06, 2012
Tax season is here, which means Americans everywhere are looking to maximize their tax benefits before filing their returns. Yet, many consumers don’t realize that long-term care insurance, designed to protect assets and independence, is one of the most tax-advantaged products on the market, according to Deb Newman, founder of Newman Long Term Care in Richfield, Minn. Newman's firm is offering a new guide, updated for 2012, which explains the many tax benefits for owning this insurance.
“To reward people who responsibly plan with long-term care insurance, the government provides many tax incentives on both federal and state levels, including Minnesota,” Newman said. Here are some of the perks Uncle Sam offers, as outlined in 2012 Guide to Tax Breaks & Incentive for Long Term Care Insurance (Federal and State), published by the National LTC Network, Inc.:
Individual Tax Incentives:
- In 1997, the federal government began offering tax-qualified policies to encourage people to buy long-term care insurance. Under a tax-qualified policy, insurance premiums qualify as itemized deductions on federal tax returns and benefits are received tax-free.
- More than 80 percent of long-term care policies sold in the U.S. are tax-qualified (which means that benefits are paid TAX FREE at time of claim).
- Many states offer tax deductions or tax credits for long-term care policyholders. For example, in Minnesota, consumers are allowed a tax credit up to $100 for long-term care insurance premiums paid during the tax year.
Incentives for Businesses
- There are also tax advantages for businesses that buy long-term care insurance. Premiums for tax-qualified policies paid for employees, their dependents, spouses and retirees are 100 percent deductible as a business expense for C corporations.
- All or a portion of premium expenses for tax-qualified policies are also deductible for sole proprietors, partners of partnerships, members of Limited Liability Companies and shareholders or employees of S corporations.
- Long-term care insurance may be offered as an employer-paid benefit, a voluntary employee paid benefit or a combination of both. Many businesses choose to use annual bonuses to fund the premiums on a voluntary basis.
- Employees receive benefits from employer-provided long-term care policies tax-free.
"Whether you're looking for information on whether long-term care insurance is allowed in a cafeteria plan (no), if it is an acceptable expenditure for a medical savings account (yes), or whether Partnership programs are available in Minnesota (yes), the answer is in the Guide," said Newman. "Many individuals and business owners who haven't considered LTC insurance in the past are now doing so because of the demise of CLASS (Community Living Assistance Services and Supports). CLASS was a long-term care insurance-like program that was part of the health care reform law and would have been offered at worksites. In late 2011, the Obama administration announced that CLASS would not be implemented. This Guide helps businesses explore the tax incentives for their remaining options." Newman Long Term Care is offering this guide for free at: http://www.newmanlongtermcare.com/taxguide
As a business or as an individual, now is the time to evaluate this important planning tool. Long-term care insurance offers protection that no other insurance can provide and with the tax incentives currently in place, it makes economic sense as well.
About Newman Long Term Care
Founded in 1990, Newman Long Term Care has focused exclusively on long-term care insurance for more than two decades. Based in Richfield, Minn., the firm is a national leader in the industry and currently sells long-term care insurance in all 50 states. For more information about Newman Long Term Care, visit http://www.NewmanLTC.com.
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