Are Medicare Premiums Tax-Deductible?
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Medicare premiums are tax-deductible, along with other certain Medicare costs, if you itemize deductions on your income taxes and if they exceed a certain percentage of your income.
Your unreimbursed medical and dental expenses — including Medicare premiums, deductibles, copayments and other medical expenses — may be tax-deductible to the extent that they are greater than 7.5% of your adjusted gross income. In other words, if your adjusted gross income is $35,000, you can deduct any out-of-pocket medical expenses above $2,625 — or 7.5% of $35,000.
Are Medicare premiums tax-deductible?
Medicare premiums are tax-deductible if you itemize deductions, although there may be restrictions:
Part A premiums are tax-deductible if you meet certain requirements. (Most people don’t pay premiums for Medicare Part A, but if you do and you’re not yet collecting Social Security benefits, these are deductible.)
Part B premiums are tax-deductible.
Part C premiums are tax-deductible.
Part D premiums are tax-deductible.
Medigap premiums are tax-deductible.
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Other Medicare expenses may be deductible
Medicare recipients may incur a variety of medical expenses that their insurance doesn't cover, from long-term care to lodging during a trip to receive medical care. Some of these expenses may be tax-deductible, within limits. According to the IRS, tax-deductible medical expenses include:
Artificial teeth.
Bandages.
Capital expenses, such as what you pay to add ramps to your home or widen doorways.
Eye exams and eyeglasses.
Guide dog or service animal costs.
Hearing aids.
Long-term care insurance premiums.
Nursing home expenses, if you’re there principally for medical care.
Personal protective equipment, such as masks and hand sanitizer.
Psychiatric care.
Transportation, if it's primarily for medical care.
Wheelchair.
Wig, if a doctor advises one.
There are limits on the deductibility of long-term care insurance premiums. For tax year 2022, the maximum tax deduction for long-term care premiums for people ages 61 to 70 is $4,510 per person; for ages 71 and up, the limit is $5,640. (These limits are per person.)
Medicare expenses that aren’t deductible
Not every medical cost counts toward your deductible expenses. The following items can't be included:
Cosmetic surgery.
Health club dues.
Health savings account contributions (or anything paid for by an HSA).
Medicines or drugs from other countries.
Nonprescription drugs or medicines.
Teeth whitening.
Anything insurance reimburses.
Deducting Medicare premiums if you’re self-employed
Are you freelancing or doing some consulting work in retirement? If you’re self-employed, you may be able to deduct any premiums you’re paying for Medicare plans for yourself and your spouse without meeting the 7.5%-of-income threshold. You must meet certain conditions:
You must report a net profit from your business.
You and your spouse may not be eligible for any health coverage through an employer.
Consider seeking professional tax advice
As with much of tax law, deductions for Medicare and other health care expenses are complicated. IRS Publication 502 offers details on medical expense deductions, but it’s a lot to digest. Deductions also work differently if you’re self-employed.
You need to determine whether itemizing deductibles is your best overall tax strategy. It's best to consult with a tax professional before claiming any deductions.
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