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1.
Premiums paid for qualified long-term care policies are tax-deductible _______.
Under some circumstances. Tax deductibility is limited by factors such as your total medical expenses.
2.
In order for a long-term care policy to be tax-qualified, it may not have the following benefit trigger:
Medical necessity. LTC policies that are not tax-qualified very often include "medical necessity" on the list of benefit triggers.
3.
A long-term care policy must pay benefits only to the provider to qualify for tax benefits.
False. The law makes clear that benefits from a tax-qualified policy are tax-free if used to pay or reimburse you for long-term care expenses that are not covered in some other way.
4.
The law that provided clear guidance on tax-qualified policies gave virtually no clue about the taxability of long-term care benefits paid on a non-tax-qualified policy.
True. The same law that provided clear guidance on tax-qualified policies gave virtually no clue about the taxability of long-term care benefits paid from any other kind–i.e., a non-tax-qualified policy.
5.
For tax purposes, long-term care insurance premium expenses are considered _______.
All of the above. For most taxpayers, LTC premiums are considered a medical expense for income tax purposes, subject to 10 percent AGI itemized deduction limits.