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Deducting long-term care insurance premiums
Dear Tax Talk:
This valuable insurance provides you with an allowance for nursing care when you’re too old to do it for yourself. Sold by many life-insurance agents, the costs of these policies are partially deductible as medical expenses subject to the 7.5 percent of your adjusted gross income limitation or, if you’re self-employed, the premiums are deductible as an adjustment to gross income.
How much you can deduct depends on your age, just as the amount of premium depends on your age. The following amounts are deductible provided you paid so much in premium:
The amounts that you receive under the policy are generally tax-free when used for long-term care.