Yes, your Medicare premiums can be tax deductible as a medical expense if you itemize deductions on your federal income tax return.
If you’re self-employed, you may be able to deduct your Medicare premiums even if you don’t itemize. Another way to get a tax benefit for Medicare premiums: You can withdraw money tax free from a health savings account (HSA) to pay Medicare premiums for yourself and your spouse if you’re 65 or older.
Can I deduct Medicare premiums as a medical expense?
Yes, if you first meet two requirements:
- You must itemize your deductions on your tax return.
- You can deduct medical expenses only after they add up to more than 7.5 percent of your adjusted gross income (AGI).
AARP successfully fought to keep the deduction threshold from rising to 10 percent, and now the 7.5 percent is permanent. For example, if your AGI is $50,000, you can deduct medical expenses in excess of $3,750. If you had $5,000 in eligible medical expenses, you could deduct $1,250 on your income tax return.
What are the rules for itemizing deductions?
To write off a portion of your health care costs, you must keep your receipts and other records and itemize your deductions rather than take the standard deduction. To make this worthwhile, your total itemized deductions — including but not limited to charitable gifts; eligible medical expenses; up to $10,000 in local and state income, property or sales taxes; and tax-deductible mortgage interest — must be more than the easier-to-claim standard deduction.
You have until the April 18, 2023, tax-filing deadline to deduct eligible premiums and other expenses you paid in 2022.
What’s your standard deduction?
The Tax Cuts and Jobs Act of 2017 increased the standard deduction significantly, and the amounts rise annually based on inflation.
|Married couple, filing jointly||$25,900||$27,700|
|Single, 65 and older||$14,700||$15,700|
|Married couple, both 65 and older, filling jointly||$28,700||$30,700|
Note: If one spouse is younger than 65, the standard deduction will be less.
What Medicare expenses are tax deductible?
If you qualify, you can deduct Medicare and other related insurance premiums when you itemize, including:
Medicare Part A although most people don’t have to pay Part A premiums.
Medicare Part B, which was $170.10 a month for most people in 2022, decreased to $164.90 in 2023. The premiums can still be tax deductible even if they’re deducted automatically from your Social Security benefits. If you have to pay a high-income surcharge for Part B premiums — also called the Income-Related Monthly Adjustment Amount (IRMAA) — your full premiums can still be tax deductible.
Medicare Part D prescription plans, including the high-income surcharge.
Medicare Advantage, the private alternative to original Medicare.
Medicare supplement insurance, the private plans also known as Medigap.