Long Term Care premiums on Schedule E?

[CB Lover]

Can Long Term Care premiums be deducted under insurance on Schedule E?

[RayW7 · Accepted solution]

No, The IRS does not recognize managing rental properties reported on Schedule E as a business. Consequently, they do not allow any business overhead deductions, including cost of health insurance.

Premiums for qualified* long-term care insurance policies are deductible on your 2020 federal taxes (if you itemize) up to these per-person amounts. Like any other medical expense, you have to itemize to get the deduction.

• $430 — under age 41 as of December 31, 2020
• $810 — age 41–50 as of December 31, 2020
• $1,630 — age 51–60 as of December 31, 2020
• $4,350 — age 61–70 as of December 31, 2020
• $5,430 — age 71 or higher as of December 31, 2020

Some states also have their own long-term care credit or deduction; when you do your state taxes, we'll let you know if your state offers tax breaks for long-term care.

*A qualified long-term care insurance policy is guaranteed renewable, has no cash surrender value, doesn't cover Medicare-reimbursed expenses, nor uses any refund to reduce future premiums (except in death or cancelation).

[CB Lover]

Thanks so much for the information.