The Tax Benefits of Living at a Life Plan Community

Let’s be honest: No one likes paying taxes.

Older adults getting ready to retire are rightfully concerned about making sure they have the money needed to live well into retirement. It turns out that, compared to living at home, moving to and living in a Life Plan Community may be more affordable, with tax benefits that may surprise you.

When moving to a new community to spend their golden years, retirees would do well to consider the benefits that certain types of lifestyles can have – not just on their well-being, but on their taxes, too. 

“Our residents qualify for significant tax benefits when they choose to live in a Life Plan Community like ours,” says Cris Royer, marketing director at The Estates at Carpenters, a Life Plan Community in Lakeland, FL, that offers Lifecare. “In fact, when you run the numbers, it can be more financially beneficial to move into a Life Plan Community that offers Lifecare than it is to live at home – even after the entrance and monthly fees are taken into consideration.”

In the end, health care costs are the deciding factor. A Life Plan Community that offers Lifecare helps older adults by providing an independent lifestyle and access to future care at predictable monthly rates.

Recent tax laws state that older adults itemizing their taxes can deduct medical expenses exceeding 10% of their adjusted gross income or AGI. Living at a Life Plan Community like The Estates at Carpenters presents several opportunities for tax deductions. They include:

  • Your entrance fee is considered by the IRS to be a “prepayment” for any future care you need if your health requires it. And because it’s a prepayment for medical services … it’s tax-deductible.
  • Part of your ongoing monthly fees can also be deductible. Every year, a Life Plan Community will provide residents with a written notice that lays out what percentage of the expenses they paid the previous year are considered tax-deductible (making it a little easier for you to do your taxes).

Be sure to discuss medical expense tax deductions with your financial advisor.

The Estates at Carpenters offers a Type A Lifecare contract, which guarantees our residents unlimited lifetime access to assisted living, skilled nursing or rehabilitation services at a consistent rate, even if their health needs change significantly. However, this benefit is only available to residents who move into independent living while they’re still active and healthy. It’s important to consider your options and make the move early if you want to reap the full financial benefits of a Life Plan Community – in addition to all the amenities, services, wellness programming, dining options and tax perks.

And when it comes to tax perks, the community’s home state ranks highly, too.

“Besides the tax benefits you’ll receive at our community, you’ll also get many tax perks by moving to Florida,” says Royer. “Florida is considered one of the most tax-friendly states for retirees for good reason. For starters, Florida doesn’t have a state income tax, which means you won’t pay any taxes on Social Security benefits, IRAs, pensions, 401(k)s, and other retirement income. We also don’t have state inheritance taxes, so you won’t have to pay state taxes on any money that’s willed to you. We also don’t have estate taxes or capital gains taxes.”

To learn more about the financial perks of moving to our Life Plan Community, check out our Cost of Living Calculator to see how you might benefit from making a move.

About The Estates at Carpenters

The Estates at Carpenters is a Life Plan Community offering worry-free independent living, assisted living, and high-quality skilled nursing care and rehabilitation. For 36 years, The Estates has provided older adults in the area with an active, engaging lifestyle filled with abundant choices, amenities, and services that make life easier. A lifestyle designed to keep older adults healthy and well today – and tomorrow.

For more information on The Estates or to RSVP to an upcoming event, contact Cris at 863-279-4503 or visit our website.

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