For those who are on Medicare, paying for monthly premiums and medical procedures can be financially taxing. Costs go up on an annual basis, and many people look for ways to save money. Monthly premiums for Medicare can be high. However, there may be relief. 

Medicare Supplement premiums are tax deductible, and this may come as a relief to those who struggle to pay monthly premiums and other medical costs that arise. According to the AARP, if you keep an itemized list of deductions on your income tax return, your Medicare premiums can be deemed a medical expense. 

Those who are self-employed may deduct Medicare premiums, if they keep an itemized list of their deductions. You may also withdraw B, D & C funds tax free from a Health Savings Account or HSA. You can use this money to pay for premiums for yourself or for “you and your spouse.” You can do this if you are aged 65 or older. But bear in mind that you cannot use your HAS to reimburse yourself for supplement insurance premiums.

If you want to deduct your Medicare premiums as a medical expense, you must make sure all deductions are itemized on your tax return. You cannot deduct medical expenses until they account for 7.5 percent of your total adjusted gross income or AGI. If you want to claim premiums as a tax deduction, it is important to keep records and receipts to document what you have paid. 

Be sure to itemize deductions, as opposed to making standard deductions. Itemized deductions can include medical expenses that cost up to $10,000 in state and regional income. Interest on tax deductible mortgage and sales tax also count as itemized deductions. If you’d like, you can claim insurance premiums and Medicare as deductions.

You can deduct Medicare Part A, even though few people pay premiums on Medicare Part A. In 2022, the monthly premium for Medicare Part B was $170.10 per month. However, this amount decreased to $164.90 this year. Premiums are eligible to be tax deductions, even if they are taken out of your monthly Social Security payment. 

If you pay the high-income surcharge called Income-Related Monthly Adjustment Amount (IRMAA), your entire premium can be a tax deduction. Medicare Part D Prescription Plans are also tax deductible. However, a high-income surcharge may apply. Medicare Advantage and supplement Medigap plans are also tax-deductible. 

If you have long-term care insurance, you may deduct part of your premiums for policies. However, this will depend upon your age, and premiums go up as you move into a higher age bracket. Surprisingly, many out-of-pocket medical expenses can be claimed as a tax deduction if your supplement insurance company does not give you a reimbursement. Vision, hearing, and dental equipment and procedures may be tax deductible.

The cost of eye surgery and corrective procedures are also tax deductible as well. Medical equipment, such as wheelchairs and crutches, can be fully covered. Other supplies, including bandages, are covered as well. Some psychiatric care costs, such as psychiatrist visits and psychology costs, are covered.
Mental health care like these may be covered, even if the cost of treatment exceeds the amount allotted for psychological care.

There may be cases where individuals with disabilities need to make changes to their home to accommodate their disability. You can deduct the cost of installing wheelchair ramps and grab bars in showers. The cost of making hallways and doorways wider can be quite steep, so claiming these as deductions makes life more comfortable and affordable for individuals with disabilities.

But what expenses does Medicare not cover? According to experts, Medicare does not cover chiropractic care or acupuncture. Cosmetic surgery, such as hair transplants, teeth whitening, and liposuction are excluded from coverage and are not tax deductible. Late enrollment penalties that are added to Medicare Part B and Part D are not tax deductible, so you must pay for these fees out-of-pocket.

Except for insulin, nonprescription medications are not tax deductible. However, travel expenses to get medical care for emergencies are covered. You cannot be reimbursed for late enrollment fees.

Under Schedule A, Itemized Deductions for Form 1040, your supplement insurance is tax deductible as a medical expense. You can deduct the amount that goes over a specific percentage of your AGI, experts say. The amount, however, will vary depending on how old you are at different times of the year.

The vast majority of those who pay taxes do not know that premiums on Medicare supplement plans can be claimed as a deduction and that they count as a medical expense. You can include batteries for hearing aids and mileage to see your provider as deductions. In 2014, the rate for mileage was 23 and a half cents per mile.

That cost went down to 23 cents in 2015. Parking and tolls are also factored into that rate. If you are required to pay deductibles for Medicare Parts A, B, and D, Medigap plans, and Medicare Advantage, you may be able to deduct these premiums. These can be claimed as an adjustment to your income under Schedule 1 on “your Form 1040.”

According to Forbes Advisor, supplemental insurance premiums are typically deductible, but they are only deductible for medical expenses. Some people may wonder if other types of insurance, such as COBRA, are tax deductible. You can deduct the costs associated with your COBRA insurance. If you have a high deductible plan, you may not have to count HSA contributions as part of your income, but this will depend on your situation and filing status.

According to experts, the contribution amount is $7,300 for families and $3,650 for individuals. It may be wise to take an itemized deduction if you had many medical and dental expenses that were not reimbursed. The standard deduction for a single taxpayer is $12,950 and $25,900 for those filing jointly. 

Only qualifying medical expenses should be deducted. If you spend thousands of dollars on medical costs, and they don’t meet the criteria, you may be out of luck. Because of this, it may be a good idea to stick with the “standard option,” experts say.

If you itemize your deductions, you can deduct expenses that go beyond a percentage of your income. However, be aware that you can only deduct the cost of medical expenses that go beyond 7.5 percent of your AGI. Other expenses that may be itemized include skilled nursing, hospice, and hospital care. Ambulance rides, doctor visits, and diagnostic tests can also count as deductions. 

Medicare enrollees pay for roughly 15 percent of their medical expenses through their monthly Medicare premiums. This adds up to a lot of money over the years, but some Medicare beneficiaries decide to deduct their premiums when they file taxes each year. 

Self-employment can be a benefit for seniors who want to save money on their premiums. An increasing number of seniors are working for themselves, because of changing norms and financial shifts. Those who are self-employed and receiving Medicare or a supplement policy can benefit from using their premiums as a tax deduction. 

Self-employed individuals can run any type of business, whether they sell their services or run a restaurant chain. As of 2012, the Internal Revenue Service began allowing the self-employed to deduct their Medicare premiums from “their federal taxes.” This applies to Medicare Parts A and B, Medicare Advantage Plans, and Medigap policies.    

The Federal government has given all individuals the ability to deduct all premiums, including those of their spouse. But what else qualifies as self-employment? According to experts, you are self-employed if you are a “sole proprietor” under Schedule C. You use a Schedule C form to report how much money you lost or made from your business. 

You are also considered self-employed if you are a partner under Schedule E, an “S corporation shareholder with a minimum of two percent in company stock, or a limited liability member of the company. Regardless of the type of business you own, you are required to report your profits from your income if you would like to claim your supplement premiums as a deduction. To do this, you must fill out a self-employed health insurance deduction on Schedule 1 of a 1040 form.  

You must earn an income from your business to claim premiums as a deduction. If you make no money off your business, there is no point in trying to claim premiums as deductions. 

If you have the eligibility to enroll in an employer-subsidized health plan, you are unable to use a self-employed health insurance deduction. While you can deduct supplement premiums, there are also several items that are not tax deductible. These include dues for health clubs, toothpaste, unnecessary nicotine items, vitamins, and diet food.  

For Part A premiums to be deductible, you must meet specific criteria. Most Part A beneficiaries do not pay premiums. Because of this, they may not qualify to claim premiums as a deduction.   

8 Sources 

MedigapCoverage has strict sourcing guidelines to ensure our content is accurate and current. We rely on peer-reviewed studies, academic research institutions, and medical associations. We strive to use primary sources and refrain from using tertiary references.

https://www.aarp.org/health/medicare-qa-tool/are-medicare-premiums-tax-deductible/.

https://www.marca.com/en/lifestyle/us-news/personal-finance/2023/02/07/63e275e3268e3edf4a8b45d9.html

https://www.bankrate.com/taxes/are-medicare-supplement-plans-deductible/

https://www.forbes.com/advisor/health-insurance/is-health-insurance-tax-deductible/

https://turbotax.intuit.com/tax-tips/self-employment-taxes/-what-is-a-schedule-c-irs-form/L7v0iDelI

https://turbotax.intuit.com/tax-tips/health-care/can-i-claim-medical-expenses-on-my-taxes/L1htkVqq9

https://www.nerdwallet.com/article/insurance/medicare/what-is-the-medicare-irmaa

https://www.insurance.ca.gov/01-consumers/110-health/40-lost/continuation-cov.cfm