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?
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.
Give me a call and we can discuss this more.
800‐200‐9194, ext. 206
~ John Roberts
VP, TWH Agency, Inc.