Alert
Close

Tell your senator to end the gridlock and renew the Older Americans Act now. Learn more

HIGHLIGHTS

Open
AARP Staying Sharp: Keep Your Brain Healthy

AARP REALPAD

The tablet with free 24/7 customer support. Learn More

AARP VETERAN MEMBERSHIP

Military and Veterans Discount

CONTESTS AND SWEEPS

AARP’s Picture Your Retirement Sweepstakes

Enter the $50K Picture Your Retirement Sweepstakes. Ends 8/31/15. No purchase necessary. Enter for Official Rules.

KEEP BRAIN ACTIVE!

AARP Games - Play Now!

AARP Books

Medicare for Dummies book cover

Get the answers you need, from Patricia Barry, AARP's Ask Ms. Medicare

Share Your Thoughts

Reader stories help us fine-tune our education efforts and strengthen our calls for action on issues that matter most to you. We read and learn from every story and may use yours (with permission) to brief legislators, inspire other readers and more. Please share your story with us. Do

Most Popular

Viewed

Ask Ms. Medicare

Tax Deductions for Medicare Expenses

Medicare premiums are deductible as medical expenses on your federal taxes if you meet certain conditions set by the IRS.

Q. Can I deduct the cost of my Medicare premiums as a medical expense on my 1040 federal income tax return?

A. Yes, if you meet certain conditions required by the IRS. In fact, when filing an itemized Schedule A (1040) tax return, you may be able to deduct many medical and dental expenses as well as Medicare premiums. But you can deduct only those expenses that exceed 7.5 percent of your adjusted gross income (AGI).

Let’s say your AGI is $30,000. Of that, 7.5 percent is $2,250. If your total allowable medical expenses for the year are $4,000, you’d be able to deduct $1,750 ($4,000 minus $2,250). If, in this example, your medical expenses are less than $2,250, you couldn’t claim any as a deduction.

What are allowable medical expenses?

The list, as defined by the IRS, is long. It generally covers any of the costs of diagnosis and treatment of an illness or injury, including medical supplies and equipment and preventive medical care. Allowable expenses also include some items you probably wouldn’t expect—such as the cost of transportation to get medical care (even if you use your own vehicle) and the cost of altering your home or installing special equipment when done for medical reasons.

Specifically, if you’re a Medicare beneficiary, the costs you can count as allowable medical expenses include:

  • Premiums for Part B, for Medicare private health plans and for Part D drug plans. If you have to pay a premium for Part A, that’s allowed too.
  • Premiums for medigap supplemental insurance.
  • The amount you pay out of pocket for deductibles and copayments or coinsurance for Medicare Parts A, B and D services.
  • The amount you pay out of pocket for prescription drugs in the Part D doughnut hole.
  • Amounts you pay out of pocket for services Medicare does not generally cover, such as routine checkups, hearing aids, medically necessary eyeglasses and contact lenses, dental treatment and nursing home care.
  • Premiums for long-term care insurance (subject to certain limitations).

Costs you cannot count include:

  • Premiums for group health insurance (such as employer-sponsored insurance) that are paid out of pretax dollars.
  • Payments made for medical services that were paid by an insurer or any other source.
  • Late penalties added to Part B or Part D premiums.
  • Prescription drugs bought from abroad.
  • Nonprescription drugs, vitamins and supplements, unless recommended by a physician to treat a specific medical condition.

Patricia Barry is a senior editor at the AARP Bulletin.

Topic Alerts

You can get weekly email alerts on the topics below. Just click “Follow.”

Manage Alerts

Processing

Please wait...

progress bar, please wait

Tell Us WhatYou Think

Please leave your comment below.

Advertisement

Discounts & Benefits

From companies that meet the high standards of service and quality set by AARP.

Walgreens 1 discount membership aarp

Members can earn 50 points per $1 spent on select health & wellness products at Walgreens.

member benefit aarp hear usa

Members can save 20% on hearing aids with the AARP® Hearing Care Program provided by HearUSA.

Eye Med 4 Membership Benefit AARP Discount

Members save up to 60% on eye exams and 30% on glasses at Target Optical.

Membership Benefits Discounts Email Genius

Brain boost? Get AARP email for access to memory exercises & more that help you focus.

Rewards for Good

Your Points Balance:

Learn More

Earn points for completing free online activities designed to enrich your life.

Find more ways to earn points

Redeem your points to save on merchandise, travel, and more.

Find more ways to redeem points

Advertisement