If you receive Social Security or railroad retirement benefits and are over age 65, or you qualify for Medicaid Part A due to having a disability, end-stage renal disease or amyotrophic lateral sclerosis, you automatically qualify to receive Medicare Part B medical insurance. Medicare Part B is an insurance plan that helps pay for doctor and medical service in exchange for a monthly premium.
The Internal Revenue Service allows you to deduct your Medicare Part B premiums if you choose to itemize your deductions. Keep in mind, however, that in order to claim your medical expenses your total bill must be valued at more than 7.5% of your adjusted gross income.
Are Medicare Premiums Tax Deductible?
The IRS offers two deductions: the standard deduction and itemized deductions, both of which reduce your taxable income. When you itemize your taxes, you opt to claim various actual deductible expenses, instead of just choosing the one-size-fits-all standard deduction. Only certain expenses, such as home mortgage interest, charitable contributions and medical expenses, qualify as itemized deductions. When you itemize, you enter all of your qualifying expenses in Schedule A on your Form 1040.
In addition to Medicare Part B, you might also pay monthly premiums for Medicare Part C, also known as Medicare Advantage, and Part D for prescription drug coverage. The IRS allows you to deduct any of your out-of-pocket medical expenses, including the premiums you paid for Part C and Part D. These are relatively common tax deductions for seniors in particular. Include these premiums, along with your Part B premiums, in Schedule A.
Medical expenses are not limited to just your Medicare premiums. You can also claim copayments, prescription costs, mileage, dental expenses and expenses for a new pair of glasses. The amount of medical expenses you can deduct on your taxes, however, depends on your adjusted gross income. Any medical expense you pay for out of pocket because it's not covered by Medicare or falls under your Medicare annual deductible is included.
To claim any medical expenses at all, your expenses must exceed 7.5 percent of your adjusted gross income . For example, if you had an adjusted gross income of $20,000, your medical expenses must exceed $1,500.
2018 Tax Year Changes
As of 2018, the standard deduction is increasing to $12,000 for single people and $24,000 for married couples filing jointly. This may mean that it no longer makes sense for some people to claim Medicare Part B premiums and other medical expenses on their taxes, since they'll save more simply taking the standard deduction.
2017 Tax Year Deductions
The standard deduction is $12,700 for married couples filing jointly, $9,350 for head of household or qualifying widows, and $6,350 if you file as single or married filing separately for the 2017 tax year. If the amount of your itemized deductions is not more than the standard deduction for your filing status, you are better off claiming the standard deduction. But when you claim the standard deduction, you cannot write off your Medicare Part B premiums. or any other itemized expense.
- Social Security Administration: Medicare
- Internal Revenue Service: Should I Itemize?
- Internal Revenue Service: Publication 554
- eHealth Medicare: What Is Medicare Part A?
- Internal Revenue Service: In 2017, Some Tax Benefits Increase Slightly Due to Inflation Adjustments, Others Are Unchanged
- Nolo: Top Seven Tax Deductions for Seniors and Retirees
- Forbes: New: IRS Announces 2018 Tax Rates, Standard Deductions, Exemption Amounts And More
- Medicare: Medicare 2018 Costs at a Glance
- Forbes: What The 2018 Tax Brackets, Standard Deductions And More Look Like Under Tax Reform
Angela M. Wheeland specializes in topics related to taxation, technology, gaming and criminal law. She has contributed to several websites and serves as the lead content editor for a construction-related website. Wheeland holds an Associate of Arts in accounting and criminal justice. She has owned and operated her own income tax-preparation business since 2006.