Sole Proprietor

Deductibility of Employer-Paid Premiums 
Sole Proprietors who purchase and pay for Tax-Qualified Long-Term Care Insurance policies for themselves, their spouses and their tax dependents may claim a deduction for the premiums paid as medical care expenses (IRC Sec. 162(l)(1)(A) and Sec. 213). 

Prior to tax year 2003, only a percentage of the eligible Tax-Qualified Long-Term Care Insurance premiums paid by a self-employed individual were deductible as medical care expenses. However in tax year 2003 and thereafter, the full amount of the Tax-Qualified Long-Term Care Insurance premiums paid by the self-employed individual may be deducted (IRC Sec. 162(l)(1)(B). See the following table for more information. 

Tax Year Applicable Percentage of TQ LTCI Premium
Deductible as Self-Employed Health Insurance
2014 100%

Further, as in the case of individual taxpayers, the amount of the Tax-Qualified Long-Term Care Insurance premiums that a self-employed individual may deduct as Self-Employed Health Insurance is subject to the following dollar limits. 

Age Eligible Premium 2014 Limit Eligible Premium 2013 Limit
40 and Younger $370 $360
41 - 50 $700 $680
51 - 60 $1,400 $1,360
61 - 70 $3,720 $3,640
71 and Older $4,660 $4,550

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