Yes, your Medicare premiums can be deductible if you itemize on your federal income tax return and qualify to deduct your medical expenses.
To write off a portion of your health care costs, you must keep your receipts and other records rather than take the standard deduction. To make this worthwhile, your total itemized deductions — including but not limited to charitable gifts, eligible medical expenses, local and state income or sales taxes, and tax-deductible mortgage interest — must be more than the easier-to-claim standard deduction.
Expenses and deductions for 2022 can be taken on the return you’ll file in 2023. Tax day is April 18, 2023. You’ll take your 2023 expenses off the return you file in 2024.
Like almost anything related to taxes, calculating how much of your medical expenses are deductible is tricky. You can deduct only the portion of your qualifying medical expenses that are more than 7.5 percent of your adjusted gross income (AGI). (AARP successfully fought to keep the deduction threshold from rising to 10 percent.)
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.
If you have self-employment income, you may be able to deduct your Medicare premiums from your income without having to itemize.
If you qualify, you can deduct Medicare and other related insurance premiums when you itemize, including these:
In addition, other out-of-pocket medical expenses are eligible, with a caveat. Other insurance, such as a Medicare Advantage plan, Medigap or retiree health insurance, can’t also have reimbursed you for:
See IRS Publication 502, Medical and Dental Expenses, for a full list of eligible expenses and rules.
You can’t deduct the following Medicare-related expenses.
For the most part, yes. If you saved money in a health savings account (HSA) before you enrolled in Medicare, you may be able to get an even bigger tax benefit by withdrawing its tax-free money to pay for Medicare premiums and other medical expenses.
You don’t have to itemize to take the withdrawals as eligible expenses. But you can’t double-dip and take both tax-free HSA withdrawals and a tax deduction for the same medical expenses.
While you can’t make new contributions to an HSA after you enroll in Medicare, you can withdraw the money without penalty for eligible medical expenses at any age. This includes your costs for insurance deductibles and copayments, most medical expenses that qualify for a tax deduction, and a few additional expenses, such as over-the-counter medications.
If you’re 65 or older, you can withdraw money tax free from an HSA to pay premiums for Medicare Part A if you aren’t eligible for free Part A hospitalization, Part B doctor visits and other services, Part D prescription plans, and Medicare Advantage. However, the IRS doesn’t allow tax-free HSA withdrawals for Medigap premiums at any age.
Even though Medicare premiums are tax deductible, premiums paid for employer health insurance usually are not. If you’re still working and have health insurance there, you generally pay those premiums with pre-tax money.
In that case, you’re already getting a tax break for your health insurance premiums. So you can’t take a deduction for them too.
Published October 27, 2022
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