Deductibility of Qualified Long-term Care Expenditures and

Eligible Long-Term Care Insurance Premiums.

Beginning in 1997, the amounts you pay for "eligible long-term care insurance premiums" to cover qualified long term care services are deductible medical care expenses up to specified dollar limits which depend on your age (and the age or your spouse, if applicable).

Beginning 1998, age defined dollar amounts will be increased by a medical care cost adjustment to reflect inflation which will be published by the IRS.

If a single person over age 70 purchases eligible long-term care coverage, the limit is $2,500. If, a husband and wife each pay eligible long-term care premiums and file a joint return, up to $5,000 may qualify as deductible medical expenses.

But remember: to the extent long-term care services and premiums qualify as medical services, they can only be deducted to the extent that they exceed 7 ½ % of adjusted gross income. Since other rules also apply, make sure to see your CPA.

© 1997, Flying Solo. This information is general in nature and is not intended to be construed as legal advice. Because all situations are different, do not make any decisions until you have consulted with the legal professional of your choice.