Are Medicare Premiums Tax-Deductible for Recipients?

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  • Are Medicare premiums tax-deductible? The answer depends on how much you earn and how much you spend on medical care. Review the IRS rules for these deductions.

Are Medicare premiums tax-deductible? You can potentially save money on your income taxes by deducting the amount you pay toward your Medicare coverage each month. However, the ability to take this deduction depends on your overall income and other factors.

When Are Medicare Premiums Tax Deductible?

To find out if you can deduct your Medicare premiums, you need to know your adjusted gross income and the total amount of your deductible dental and medical expenses for the tax year. If these expenses are more than 7.5% of your AGI, you can deduct your Medicare premiums by submitting Form 1040, Schedule A when you file your tax return. 

Let's look at an example. If your AGI is $50,000, your Medicare premiums become deductible once you spend at least $3,750 on eligible medical and dental costs for the year. You can subtract the deductible amount from your total taxable income, which means you'll pay lower income taxes.

Keep in mind that you can only take advantage of this tax benefit if you itemize your deductions, not if you take the IRS standard deduction. In addition, even when your Medicare premiums are deductible, you can only deduct premiums you pay for Medicare Advantage, Supplement, Part A, Part B and Part D plans. You can't deduct Original Medicare premiums. 

If you're self-employed and receive Medicare, special rules apply. You can deduct the entire amount of your premium payments for the year if the IRS classifies you as a partner in a business, sole proprietor or independent contractor.

What Other Medicare Costs Are Tax-Deductible?

In addition to your premiums, you might also be able to deduct other medical and dental expenses as a Medicare beneficiary. Examples include:

  • Medical supplies and equipment
  • Preventive care services
  • Diagnostics, such as lab and tests
  • Treatment for an injury or illness
  • Transportation costs for travel to medical appointments
  • Home renovations to accommodate durable medical equipment
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