Final answer:
Jack and Jill can claim a maximum of $5,640 as a medical expense for their two long-term care policies on their federal income taxes, adhering to the IRS age-based limits on deductions for long-term care insurance premiums.
Step-by-step explanation:
The maximum amount Jack and Jill can claim as a medical expense for itemized deductions on their federal income taxes for their two long-term care policies is $5,640.For the tax year 2022, the IRS allows taxpayers to deduct the amount paid for qualifying long-term care insurance premiums, but these amounts are limited based on age. At their ages of 80 and 75, Jack and Jill can deduct a maximum of $4,510 each, provided their total medical expenses exceed 7.5% of their adjusted gross income.
However, with two policies, they can only claim a combined maximum of $5,640 for both policies as per the IRS limits. These limitations are set to prevent excessive deductions for high-income individuals and to maintain the progressivity of the tax code. The premise is that healthcare, including long-term care, remains a significant concern for the aging population, who may face substantial healthcare costs in retirement.