4 Great Tax Ideas


August 2016

Issue 44




email Nancy 


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Nancy is co-Founder of
The Boxwood Alliance
for Active Aging



Nancy Gould, Past President Estate Planning Council of Putnam County
"4 Ways to Save Taxes and 
Pay for Long-Term Care Premiums"

Take advantage of these tax saving options:
  1. Use H.S.A (Health Savings Account) funds tax free to pay your long-term care premium.  The amount that can be withdrawn for this purpose is determined by age. These same withdrawals may be made by the spouse also.  For more information: "IRS 969, Health Savings Accounts and Other Tax Favored Health Plans".
    They are as follows:
    • 40 yr and younger                 $     390
    • 41 to 50 yr                             $     730
    • 51 to 60 yr                             $  1,460
    • 61 to 70 yr                             $  3,900
    • 71 and over                           $  4,870
  2. Deduct as Medical Expense Deduction
    If you do not have a H.S.A. you can take the long-term care premiums as a medical deduction on the Federal Tax Return if the total medical deduction is 10% of your adjusted gross income (AGI). Folks who are 65 year and older can use 7.5% of AGI. See More: IRS 502 Medical and Dental Expenses and More".
  3. Tax Free Transfers from an Annuity
    Transfer money tax free from an annuity to pay the long-term care premium. This is called a 1035 transfer. The money must be paid directly to the long-term care policy in order to have the tax free status.
  4. Tax Free Transfer from Permanent Life Insurance
    You may transfer money tax free from the life insurance cash value to the long-term care insurance. Also dividends of the policy can be used.  This is a 1035 transfer. Both of these transfers may be used for a hybrid long-term care policy. This option may be interesting to the insured as they age and their needs change from the life benefit to long-term care needs. 

Please feel free to share this information with your family and friends.  Do you know someone who would like to receive this newsletter?  Please let me know via telephone 
914 242 3250 or via email  nancy.gould@acsiapartners.com

Best wishes for wrapping up your summer!