Qualified long-term care premiums are tax-deductible to the extent they exceed what percentage of AGI?

• A. Not deductible
• B. Tax-deductible to the extent they exceed 7.5% AGI
• C. Fully tax-deductible regardless of AGI
• D. Deductible only if paid with after-tax dollars

Answer: (B)

Qualified long-term care premiums are treated as medical expenses, and medical deductions are allowed only to the extent that unreimbursed expenses exceed a portion of your adjusted gross income. For these premiums, that threshold is 7.5% of AGI. So you don’t deduct the full premium; you deduct the part that pushes your total medical expenses above 7.5% of your AGI, and only if you itemize deductions. For example, with an AGI of $80,000, 7.5% is $6,000. If your total qualifying medical expenses are $8,000, you could deduct $2,000; if they’re $5,000, there’s no deduction yet.