×
Newsmax TV & Webwww.newsmax.comFREE - In Google Play
VIEW
×
Newsmax TV & Webwww.newsmax.comFREE - On the App Store
VIEW
Skip to main content
Tags: tax | disadvantages | retirement community

4 Tax Disadvantages of Living in Retirement Community

By    |   Thursday, 10 September 2015 08:24 PM

Stretching income to afford living in a retirement community can be tricky for some retirees. There are some potential tax disadvantages to consider. Here are four important considerations to work through before you move.

1. Not All Expenses Are Deductible: If you are living in a retirement community for personal rather than medical reasons, many expenses will not be tax deductible. Food and board are only deductible if you need the care for medical reasons.

Free Retirement Calculator: When Can You Retire? — Click Here to Find Out

2. Your Long-Term Care Insurance May Require Taxes: After you enter a retirement community, you may start drawing from your long-term care insurance plan. According to the American Association for Long-Term Care Insurance, your policy will issue a 1099 LTC at tax time for any draw-outs from your policy. This form will also list any payments made directly to your retirement community. Portions of these payments may be taxable as income.

3. Home Care Deductions May Not Apply: There are several tax deductions for care in the home that are not going to be applicable in a retirement community setting. The IRS allows medical deductions for the renovation of a home to accommodate a person with a disability. Costs of nursing-type help in the home can be deducted as medical expenses. The person you hire for these services does not need to be a nurse, but simply someone providing nursing-type services in the home setting.

4. Payments Toward Future Care Are Not Necessarily Deductible: Some continuing care facilities allow residents not needing current medical care to pay for care that will be needed in the future. These payments are not necessarily deductible as medical expenses. A portion of your monthly fees should be allocated toward medical expenses. The American Seniors Housing Association reports this is the deductible portion.

How Soon Can You Retire? Free Test Shows You When — Click Here

Keep in mind that tax deduction limits change as you age. Be careful to watch your limits and make sure you are getting the best tax benefit for your situation.

© 2022 Newsmax. All rights reserved.


FastFeatures
Stretching income to afford living in a retirement community can be tricky for some retirees. There are some potential tax disadvantages to consider.
tax, disadvantages, retirement community
348
2015-24-10
Thursday, 10 September 2015 08:24 PM
Newsmax Media, Inc.

Sign up for Newsmax’s Daily Newsletter

Receive breaking news and original analysis - sent right to your inbox.

(Optional for Local News)
Privacy: We never share your email address.

PLEASE NOTE: All information presented on Newsmax.com is for informational purposes only. It is not specific medical advice for any individual. All answers to reader questions are provided for informational purposes only. All information presented on our websites should not be construed as medical consultation or instruction. You should take no action solely on the basis of this publication’s contents. Readers are advised to consult a health professional about any issue regarding their health and well-being. While the information found on our websites is believed to be sensible and accurate based on the author’s best judgment, readers who fail to seek counsel from appropriate health professionals assume risk of any potential ill effects. The opinions expressed in Newsmaxhealth.com and Newsmax.com do not necessarily reflect those of Newsmax Media. Please note that this advice is generic and not specific to any individual. You should consult with your doctor before undertaking any medical or nutritional course of action.

 
TOP

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
America's News Page
© Newsmax Media, Inc.
All Rights Reserved
Download the NewsmaxTV App
NEWSMAX.COM
America's News Page
© Newsmax Media, Inc.
All Rights Reserved