The Tax Benefits of Living at a Life Plan Community

Let’s be honest: does anyone really like paying taxes? Older adults who are getting ready to retire are usually very concerned about protecting their assets so they have enough funds to live a fulfilling lifestyle – and are also concerned about protecting their estate for future generations. 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 wellbeing, 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 Jeanie Tini, Director of Marketing and Sales 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.”

It all comes down to one thing: health care costs.

2020’s tax laws state that individuals who itemize their taxes can deduct medical expenses that exceed 10 percent of their adjusted gross income (AGI). Living at a Life Plan Community has a lot of costs that, surprisingly, qualify as medical expenses, such as:

  1. Your nonrefundable 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 payment for medical services … it’s tax-deductible.
  2. Part of your ongoing monthly fees can 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).
  3. Other costs, like health insurance premiums, medical prescriptions and doctor’s visits can be itemized as health care costs as well. Depending on your situation, you may be able to deduct this portion of your yearly expenses as well.

The Estates at Carpenters offers a Type A Lifecare contract, which guarantees our residents unlimited lifetime access 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 are still active and healthy, so it’s important to consider your options and make the move early if you want to reap the full benefit of the community – and the tax perks.

“Besides the tax benefits you’ll receive at our community, you’ll also get many tax perks by moving to Florida,” says Jeanie. “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 in Lakeland, FL, 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 over 34 years, The Estates has provided older adults in the area with an active, engaging lifestyle filled with abundant choices and the 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 Jeanie at 863-279-4503 or visit our website.