Long Term Care Deductions

[Jerry D]

I have maintained a long term care policy for my wife and I that  I originally purchased whiled employed.  I have since retired but started a hobby business and rental property that generates a modest profit that I pay self-employed taxes on.  Can I deduct those LTC premiums as a self-employment business expense in the hobby business or rental property business?  To my knowledge I now pay the full amount of the premium of this LTC policy.  Both my wife and I are retired and get our health care insurance through our former employers respectively.

[DawnC · Accepted solution]

If you have a profit and Schedule C and you pay out of pocket for the long-term care policy premiums, you can claim the Self-Employment Health Insurance Deduction.    You can't include the medical healthcare insurance premiums, however, see bullet #3.  

You may be able to deduct medical, dental, and long-term care insurance premiums for yourself, your spouse, and your dependents if you or your jointly-filing spouse is self-employed.

• To get this deduction, your Schedule C must show a net profit.
• The deduction amount generally can't exceed your net profit amount.
• If you (or your spouse if filing jointly) were eligible to participate in an employer's health plan during any given month—even if you declined the coverage—the premium you paid for that month can't be claimed under this deduction.
• Health insurance premiums you paid for your child, even if you aren't claiming them as a dependent, are eligible for this deduction as long as your child was age 26 or younger at the end of 2021.
• The self-employed health insurance deduction shows up on Schedule 1, line 17.