Saturday, October 31, 2009
Question: Long-term care insurance premiums may be paid from a Health Savings Account (HSA). It is my understanding that someone on Medicare cannot have a HSA and thus take advantage of this. Does this mean that someone paying premiums from a HSA will need to stop doing so once reaching 65 and going on Medicare?
Answer: According to IRS Notice 2004-50, 2004-33, IRB 196, A-3; an individual enrolled in Medicare Part A or B may not contribute to an HSA. If someone is eligible for Medicare but has not enrolled, they may still make the contribution. The LTCi premiums would still be an allowable distribution from a HSA, just no further contributions would be allowed for this individual.
Question: Where precisely does a self-employed person write off tax-qualified LTC insurance premiums? And where does he/she write off premiums paid for her W-2 employee who is also her husband? Both policies will have shared riders.
Answer: The actual deduction for the long-term care insurance premium paid by a self-employed individual is actually taken on line 14 of Schedule C (of the For 1040). As you know, the deduction is limited to the amount of the "Eligible Premium" amount for the self-employed individual and spouse of the self-employed individual (Internal Revenue Code Section 162 (I)(2)(C) and Section 213 (d)). If the spouse is a bona fide employee of the business, then the actual long-term care premium may be deducted for the employee / spouse's policy (Internal Revenue Code Section 162 (s)).
Monday, October 26, 2009
The Internal Revenue Service (IRS) has just announced the increased deductibility levels for long-term care insurance policies purchased in 2010. I think there are several positive things worth noting ... and sharing with others.
First, the maximum deductible limit for an individual now exceeds $4,000. That should get some people's attention - even though few individuals qualify for the personal deduction. Second, the levels were increased for 2010. Pension contribution limits for 2010 were NOT increased.
Here are the 2010 limits:
Attained Age Before Close of Taxable Year
Age 40 or less: $ 330
More than 40 but not more than 50: $ 620
More than 50 but not more than 60: $1,230
More than 60 but not more than 70: $3,290
More than 70: $4,110
The per-diem limitation under 7702(d)(4) for calendar year 2010 is $290.
Friday, October 16, 2009
Friday, October 9, 2009
Monday, October 5, 2009
The Centers for Medicare and Medicaid Services has launched the federal government’s first website devoted to ranking of the 15,800 nursing homes that participate in the public insurance system. Homes are assessed based on health inspection surveys, quality control measures and staffing levels.
In this first round of rankings, twelve percent of homes earned a top rating of 5 stars; twenty-two percent earned the lowest rating of 1 star and the remaining sixty-six percent were distributed fairly evenly at 2, 3, or 4 stars.
Consumers are urged to use the ranking in their evaluation of nursing home alternatives in their area, but are advised the data is no substitute for personal visits and discussions with administrators.