Tax Benefits
When it comes to planning for your future and securing the lifestyle you want in retirement, moving to a Life Plan Community—also known as a Continuing Care Retirement Community (CCRC)—can be a smart financial choice. Beyond the peace of mind and lifestyle benefits, Life Plan Type A Communities, like Emerald Heights, offer significant tax advantages that are often overlooked. Let’s explore how these tax deductions work and how you can take full advantage of them.
What is a Life Care Type A Community?
Life Care Type A Communities provide residents with independent living, plus guaranteed access to higher levels of care—such as assisted living, skilled nursing, or memory care—at predictable or minimally increased costs. This comprehensive contract type is ideal for individuals who want financial stability and peace of mind knowing their healthcare needs will be met as they age.
Key Tax Benefits for Life Care Type A Residents
One of the biggest financial perks of moving to a Life Care Type A Community is the potential for substantial tax deductions. These benefits stem from the prepaid medical expenses included in your entry fee and monthly fees. Here’s a closer look:
1). Medical Expense Deduction
A portion of your entry fee and ongoing monthly fees can be categorized as a prepaid medical expense. Under IRS rules, medical expenses that exceed 7.5% of your adjusted gross income (AGI) are tax-deductible if you itemize your deductions.
This deduction can result in significant tax savings, especially in the year you pay the entry fee.
2). Estate Planning Advantages
By lowering your taxable income through these deductions, you can potentially preserve more of your assets for your heirs or charitable giving.
3). Consultation with Tax Professionals
It’s essential to work with a qualified tax advisor to ensure you’re maximizing these benefits. They can help you determine the exact percentage of your fees that qualify as medical expenses.
How Emerald Heights Supports Your Financial Goals
At Emerald Heights, we’re committed to providing residents with not only an exceptional lifestyle but also financial transparency and guidance. Each year, we provide a detailed breakdown of the tax-deductible portion of your fees, making it easier for you and your tax professional to take full advantage of the benefits. Our document here gives a bit more information that you can use to consult with your tax professional.
Tips for Maximizing Your Tax Benefits
One of the biggest financial perks of moving to a Life Care Type A Community is the potential for substantial tax deductions. These benefits stem from the prepaid medical expenses included in your entry fee and monthly fees. Here’s a closer look:
- Keep Accurate Records: Retain all documentation related to your entry fee and monthly fees, as well as the community’s annual statement of deductible amounts
- Work with Experts: Engage a tax professional familiar with senior living tax deductions
- Plan Ahead: Consider timing your move to a Life Care Community in a year when you anticipate higher taxable income, maximizing the impact of your deductions
Why Emerald Heights?
Emerald Heights is more than just a place to live — it’s a community designed for the way you want to live.
Enjoy engaging activities, social events, and wellness programs, all designed to help you live your best life.
Surrounded by the scenic beauty of Redmond, you can enjoy the best of the Pacific Northwest.
Enjoy peace of mind knowing that onsite care is available, ranging from assisted living to memory care and skilled nursing — all within the same campus and at the same price.
Understanding Your Tax Benefits
Understanding the tax deductions available for Life Care Type A Communities can make your decision to move to a community like Emerald Heights even more financially rewarding. With proper planning and professional guidance, you can enjoy the lifestyle you’ve always dreamed of while reaping significant financial benefits. Learn more about Emerald Heights and how we can support your financial and lifestyle goals – contact us or schedule a visit.