I want to make sure I am properly deducting long term care premiums. It appears that most people deduct them under medical expenses but I assume that is only useful if you reach the rather high medical expense threshold to beat the standard deduction. But when entering K1 information for my wife I noticed a box under "Describe the Partnership" > "I personally paid health insurance and/or long term care insurance for myself and my family." I checked that box and entered the amount of LTC premiums that my wife and I pay. TT immediately dropped the amount of tax owed so this appears to be unrelated to the regular medical expense deduction. Am I correct to enter it here? Am I right that adding LTC premiums as a medical expense would not result in a deduction if other out of pocket expenses are low?
You are correct. If entered in the medical itemized deduction area, the medical gets reduced by 7.5% or 10% (depending on age) of your adjusted gross income.
Where you are entering it now, is much better from a tax perspective, as there is no reduction due to being a K-1 holder (self-employed).
Great job! The information below is directly from the IRS web site.
Don’t Miss the Health Insurance Deduction if You’re Self-EmployedIRS Tax Tip 2013-43, March 28, 2013
If you are self-employed, the IRS wants you to know about a tax deduction generally available to people who are self-employed.
The deduction is for medical, dental or long-term care insurance premiums that self-employed people often pay for themselves, their spouse and their dependents.
Source: https://www.irs.gov/uac/newsroom/dont-miss-the-health-insurance-deduction-if-youre-self-employed
Enjoy helping others doing their taxes correctly, paying only what they owe.
Well thank you again. I didn't realize TT hired experts to help us out. I am glad they do. Enjoy your Fed retirement when you finally get to it, I am enjoying mine. 😉
I entered the premium amounts for myself and spouse, both under $4000, under self employment income expenses. TT shows it as fix needed and won't allow me to e file. The note says that the amount exceeds maximum. We showed a net profit for self employment. Why is it being questioned?