[LTPC-discussions] LTCI and tax for self employed and C corp.
Brad Fritz
ltpc-disc@ltpcalums.com
Tue, 15 Jul 2003 15:06:37 -0400
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They may be 100% deductible in 2003 but I believe the amount is based on =
attained age. Like Age 41-50 $470 is the amount you can deduct. Age 71 =
and older $3,130. Is this right? Brad
----- Original Message -----=20
From: ShampooRic@aol.com=20
To: ltpc-disc@ltpcalums.com=20
Sent: Tuesday, July 15, 2003 10:24 AM
Subject: [LTPC-discussions] LTCI and tax for self employed and C corp.
Tax laws and LTC premiums for self employed and C corporations. Even =
non tax qualified plans meet deductibility. In 23 now 100% deductible.
Richard
Self-employed
The new federal law increases the medical insurance premium tax =
deduction (which includes Long Term Care premiums) for self-employed =
individuals. The law permits a percentage of all health insurance =
premiums to be deducted from taxable income.
For a self-employed individual (including sole proprietors, partners =
and 2%+ shareholders of an S-Corporation) the general rules are as =
follows:
Tax deductions: The self-employed individual can deduct a percentage =
of eligible premiums paid for a tax qualified Long Term Care Insurance =
plan as a business expense.
Tax Years
Premium % That is Deductible=20
1999-2001 60%=20
2002 70%=20
2003 100%=20
This schedule of premium tax deductibility applies only to the =
self-employed. They do not have to itemize deductions in order to =
qualify for this deduction or satisfy the 7.5% threshold of adjusted =
gross income. The only requirement is that the deduction cannot exceed =
the net profit from self-employment.
C-Corporations
You can use 100% Deductible Corporate Dollars to
Protect Your Retirement Assets and Lifestyle
Why should busy business owners think about long-term=20
care insurance?
Today's pre-tax dollars can protect your personal assets tomorrow and =
in retirement.
Costs may be 100% tax deductible for your business and not taxable to =
the employees as gross income.
The benefits, when received, are tax-free.
Exclusively protect yourself, selected employees - even spouses!
Premium payments for a tax-qualified Long-Term Care Insurance policy =
are fully (100%) deductible as a reasonable and necessary business =
expense for C-Corporations (IRC Sec.7702B[a][3]). Rules vary for =
Sole-Proprietorships, Partnerships, and LLCs. Federal limits were =
increased in 2001. Call for specified 2001 limits.=20
LTC Policy Purchases are Not Subject=20
to Any Non-Discrimination Rules
classes of select employees are eligible for corporate-paid long-term =
care insurance. =20
Even spouses may be covered under such plans!
=20
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<DIV><FONT size=3D2>They may be 100% deductible in 2003 but I believe =
the amount=20
is based on attained age. Like Age 41-50 $470 is the amount =
you can=20
deduct. Age 71 and older $3,130. Is this=20
right? Brad</FONT></DIV>
<BLOCKQUOTE dir=3Dltr=20
style=3D"PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; =
BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
<DIV style=3D"FONT: 10pt arial">----- Original Message ----- </DIV>
<DIV=20
style=3D"BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: =
black"><B>From:</B>=20
<A title=3DShampooRic@aol.com=20
href=3D"mailto:ShampooRic@aol.com">ShampooRic@aol.com</A> </DIV>
<DIV style=3D"FONT: 10pt arial"><B>To:</B> <A =
title=3Dltpc-disc@ltpcalums.com=20
href=3D"mailto:ltpc-disc@ltpcalums.com">ltpc-disc@ltpcalums.com</A> =
</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Tuesday, July 15, 2003 =
10:24=20
AM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> [LTPC-discussions] =
LTCI and tax=20
for self employed and C corp.</DIV>
<DIV><BR></DIV><FONT face=3Darial,helvetica><FONT lang=3D0 =
face=3DArial size=3D5=20
FAMILY=3D"SANSSERIF">Tax laws and LTC premiums for self employed and C =
corporations. Even non tax qualified plans meet =
deductibility. In=20
23 now 100% deductible.<BR><BR>Richard<BR><BR></FONT><FONT lang=3D0=20
style=3D"BACKGROUND-COLOR: #ffffff" face=3DArial color=3D#000080 =
size=3D3=20
FAMILY=3D"SANSSERIF"><B>Self-employed</FONT><FONT lang=3D0=20
style=3D"BACKGROUND-COLOR: #ffffff" face=3DArial color=3D#000000 =
size=3D3=20
FAMILY=3D"SANSSERIF"><BR><BR></FONT><FONT lang=3D0=20
style=3D"BACKGROUND-COLOR: #ffffff" face=3DArial color=3D#000000 =
size=3D2=20
FAMILY=3D"SANSSERIF"></B>The new federal law increases the medical =
insurance=20
premium tax deduction (which includes Long Term Care premiums) for=20
self-employed individuals. The law permits a percentage of all health=20
insurance premiums to be deducted from taxable income.<BR></FONT><FONT =
lang=3D0=20
style=3D"BACKGROUND-COLOR: #ffffff" face=3DArial color=3D#000000 =
size=3D3=20
FAMILY=3D"SANSSERIF"><BR></FONT><FONT lang=3D0 =
style=3D"BACKGROUND-COLOR: #ffffff"=20
face=3DArial color=3D#000000 size=3D2 FAMILY=3D"SANSSERIF"><B>For a=20
self-employed individual (including sole proprietors, partners =
and 2%+=20
shareholders of an S-Corporation) the general rules are as=20
follows:<BR></FONT><FONT lang=3D0 style=3D"BACKGROUND-COLOR: #ffffff" =
face=3DArial=20
color=3D#000000 size=3D3 FAMILY=3D"SANSSERIF"></B><BR></FONT><FONT =
lang=3D0=20
style=3D"BACKGROUND-COLOR: #ffffff" face=3DArial color=3D#000000 =
size=3D2=20
FAMILY=3D"SANSSERIF"><B>Tax deductions: </B>The self-employed =
individual can=20
deduct a percentage of eligible premiums paid for a tax qualified Long =
Term=20
Care Insurance plan as a business expense.</FONT><FONT lang=3D0=20
style=3D"BACKGROUND-COLOR: #ffffff" face=3DArial color=3D#000000 =
size=3D3=20
FAMILY=3D"SANSSERIF"><BR><BR><B>Tax Years</B><BR><B>Premium % That is=20
Deductible</B> <BR><BR><BR>
<P align=3Dcenter></FONT><FONT lang=3D0 style=3D"BACKGROUND-COLOR: =
#ffffff"=20
face=3DArial color=3D#000000 size=3D2 =
FAMILY=3D"SANSSERIF">1999-2001</FONT><FONT=20
lang=3D0 style=3D"BACKGROUND-COLOR: #ffffff" face=3DArial =
color=3D#000000 size=3D3=20
FAMILY=3D"SANSSERIF"> </FONT><FONT lang=3D0 style=3D"BACKGROUND-COLOR: =
#ffffff"=20
face=3DArial color=3D#000000 size=3D2 =
FAMILY=3D"SANSSERIF">60%</FONT><FONT lang=3D0=20
style=3D"BACKGROUND-COLOR: #ffffff" face=3DArial color=3D#000000 =
size=3D3=20
FAMILY=3D"SANSSERIF"> <BR></FONT><FONT lang=3D0 =
style=3D"BACKGROUND-COLOR: #ffffff"=20
face=3DArial color=3D#000000 size=3D2 =
FAMILY=3D"SANSSERIF">2002</FONT><FONT lang=3D0=20
style=3D"BACKGROUND-COLOR: #ffffff" face=3DArial color=3D#000000 =
size=3D3=20
FAMILY=3D"SANSSERIF"> </FONT><FONT lang=3D0 style=3D"BACKGROUND-COLOR: =
#ffffff"=20
face=3DArial color=3D#000000 size=3D2 =
FAMILY=3D"SANSSERIF">70%</FONT><FONT lang=3D0=20
style=3D"BACKGROUND-COLOR: #ffffff" face=3DArial color=3D#000000 =
size=3D3=20
FAMILY=3D"SANSSERIF"> <BR></FONT><FONT lang=3D0 =
style=3D"BACKGROUND-COLOR: #ffffff"=20
face=3DArial color=3D#000000 size=3D2 =
FAMILY=3D"SANSSERIF">2003</FONT><FONT lang=3D0=20
style=3D"BACKGROUND-COLOR: #ffffff" face=3DArial color=3D#000000 =
size=3D3=20
FAMILY=3D"SANSSERIF"> </FONT><FONT lang=3D0 style=3D"BACKGROUND-COLOR: =
#ffffff"=20
face=3DArial color=3D#000000 size=3D2 =
FAMILY=3D"SANSSERIF">100%</FONT><FONT lang=3D0=20
style=3D"BACKGROUND-COLOR: #ffffff" face=3DArial color=3D#000000 =
size=3D3=20
FAMILY=3D"SANSSERIF"> <BR><BR>
<P align=3Dleft><BR>
<P align=3Dcenter></FONT><FONT lang=3D0 style=3D"BACKGROUND-COLOR: =
#ffffff"=20
face=3DArial color=3D#000000 size=3D1 FAMILY=3D"SANSSERIF">This =
schedule of premium=20
tax deductibility applies only to the self-employed. They do not =
have to=20
itemize deductions in order to qualify for this deduction or =
satisfy the=20
7.5% threshold of adjusted gross income. The only requirement is that =
the=20
deduction cannot exceed the net profit from =
self-employment.</FONT><FONT=20
lang=3D0 style=3D"BACKGROUND-COLOR: #ffffff" face=3DArial =
color=3D#000000 size=3D3=20
FAMILY=3D"SANSSERIF"><BR><BR>
<P align=3Dleft><BR>
<P align=3Dcenter></FONT><FONT lang=3D0 style=3D"BACKGROUND-COLOR: =
#ffffff"=20
face=3DArial color=3D#000000 size=3D5 FAMILY=3D"SANSSERIF"><BR><BR>
<P align=3Dleft></FONT><FONT lang=3D0 style=3D"BACKGROUND-COLOR: =
#ffffff" face=3DArial=20
color=3D#000080 size=3D3 =
FAMILY=3D"SANSSERIF"><B>C-Corporations</FONT><FONT lang=3D0=20
style=3D"BACKGROUND-COLOR: #ffffff" face=3DArial color=3D#000000 =
size=3D3=20
FAMILY=3D"SANSSERIF"><BR><BR>You can use 100% Deductible Corporate =
Dollars=20
to<BR>Protect Your Retirement Assets and Lifestyle</B><BR><BR>
<P align=3Dcenter><B>Why should busy business owners think about=20
long-term <BR>care insurance?</B><BR><BR>
<P align=3Dleft><BR>
<P align=3Dcenter><BR>
<P align=3Dleft><BR></FONT><FONT lang=3D0 style=3D"BACKGROUND-COLOR: =
#ffffff"=20
face=3DArial color=3D#000000 size=3D2 FAMILY=3D"SANSSERIF">Today's =
pre-tax dollars can=20
protect your personal assets tomorrow and in retirement.</FONT><FONT =
lang=3D0=20
style=3D"BACKGROUND-COLOR: #ffffff" face=3DArial color=3D#000000 =
size=3D3=20
FAMILY=3D"SANSSERIF"><BR><BR><BR></FONT><FONT lang=3D0=20
style=3D"BACKGROUND-COLOR: #ffffff" face=3DArial color=3D#000000 =
size=3D2=20
FAMILY=3D"SANSSERIF">Costs may be 100% tax deductible for your =
business and not=20
taxable to the employees as gross income.</FONT><FONT lang=3D0=20
style=3D"BACKGROUND-COLOR: #ffffff" face=3DArial color=3D#000000 =
size=3D3=20
FAMILY=3D"SANSSERIF"><BR><BR><BR></FONT><FONT lang=3D0=20
style=3D"BACKGROUND-COLOR: #ffffff" face=3DArial color=3D#000000 =
size=3D2=20
FAMILY=3D"SANSSERIF">The benefits, when received, are =
tax-free.</FONT><FONT=20
lang=3D0 style=3D"BACKGROUND-COLOR: #ffffff" face=3DArial =
color=3D#000000 size=3D3=20
FAMILY=3D"SANSSERIF"><BR><BR><BR></FONT><FONT lang=3D0=20
style=3D"BACKGROUND-COLOR: #ffffff" face=3DArial color=3D#000000 =
size=3D2=20
FAMILY=3D"SANSSERIF">Exclusively protect yourself, selected employees =
- even=20
spouses!</FONT><FONT lang=3D0 style=3D"BACKGROUND-COLOR: #ffffff" =
face=3DArial=20
color=3D#000000 size=3D3 FAMILY=3D"SANSSERIF"><BR><BR><BR>
<P align=3Dcenter></FONT><FONT lang=3D0 style=3D"BACKGROUND-COLOR: =
#ffffff"=20
face=3DArial color=3D#000000 size=3D2 FAMILY=3D"SANSSERIF">Premium =
payments for a=20
tax-qualified Long-Term Care Insurance policy are fully (100%) =
deductible as a=20
reasonable and necessary business expense for C-Corporations =
(IRC =20
Sec.7702B[a][3]).</FONT><FONT lang=3D0 style=3D"BACKGROUND-COLOR: =
#ffffff"=20
face=3DArial color=3D#000000 size=3D3 FAMILY=3D"SANSSERIF"> =
</FONT><FONT lang=3D0=20
style=3D"BACKGROUND-COLOR: #ffffff" face=3DArial color=3D#000000 =
size=3D2=20
FAMILY=3D"SANSSERIF">Rules vary for Sole-Proprietorships, =
Partnerships, and=20
LLCs. Federal limits were increased in 2001. Call for =
specified=20
2001 limits.</FONT><FONT lang=3D0 style=3D"BACKGROUND-COLOR: #ffffff" =
face=3DArial=20
color=3D#000000 size=3D3 FAMILY=3D"SANSSERIF"> <BR><BR>
<P align=3Dleft><BR><BR>
<P align=3Dcenter></FONT><FONT lang=3D0 style=3D"BACKGROUND-COLOR: =
#ffffff"=20
face=3DArial color=3D#ffffff size=3D4 FAMILY=3D"SANSSERIF">LTC Policy =
Purchases are=20
Not Subject <BR>to Any Non-Discrimination Rules<BR></FONT><FONT =
lang=3D0=20
style=3D"BACKGROUND-COLOR: #ffffff" face=3DArial color=3D#ffffff =
size=3D2=20
FAMILY=3D"SANSSERIF">classes of select employees are eligible for =
corporate-paid=20
long-term care insurance. <BR>Even spouses may be covered =
under=20
such plans!</FONT><FONT lang=3D0 style=3D"BACKGROUND-COLOR: #ffffff" =
face=3DArial=20
color=3D#ffffff size=3D3 FAMILY=3D"SANSSERIF"><BR><BR>
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