Consumers who have long-term-care insurance will get a better tax credit in 2015, IRS announced in October 2014, but only if they meet the threshold for such a deduction.
The increase will be about 2 percent across the board, ranging from an increase of $10 to $380 for consumers who are 40 or younger to an increase of $90 to $4,750 for consumers who are older than 70. However, the increase will benefit retirees the most, because the credit is accepted only if 10 percent of a taxpayer’s income goes to out-of-pocket medical expenses.
That threshold is more difficult for consumers who are in their 50s and still work, says accountant George W. Smith IV, because a credit of, say, $1,430 most likely wouldn’t come close to the 10 percent income threshold. However, taxpayers who are 65 or older have to meet only a 7.5 percent income threshold, and they would have a credit of $3,800 starting in 2015, he says.