Can Seniors Deduct Medicare Premiums?

Can Seniors Deduct Medicare Premiums?
Everyone needs medical insurance, but as we age, our plan needs change. Individuals 65 and older who have basic medicare insurance may need additional plans to reach the level of coverage they need.

As with most types of insurance plans these days, they can be costly. Particularly, if you are married and both you and your spouse are paying premiums. There’s also the concern that some networks don’t provide specialists who offer quality care. But that’s something to be addressed in a different article.

When it comes to seniors being allowed to deduct medicare premiums, you may qualify for a tax break.

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Can Seniors Deduct Medicare Premiums?

After reaching our golden years, you would think life would be easier. Unfortunately, that is not always the case, particularly when it comes to our healthcare needs. In fact, as we age, our medical and health needs often expand.

Many aging adults are incurring higher out-of-pocket expenses that can upset even the best retirement budget. As such, taxes is certainly at the top of that list and can be a stressful experience. For these reasons, seniors are looking for answers to curtail these costs such as whether they can deduct medicare premiums on their tax returns.

Below we cover essentials facts about tax deductions for medicare premiums, and medical expense deductions.

Tax Deductions for Medicare Premiums

You can combine premiums for medicare health insurance with other qualifying health care expenses. But only for the purposes of claiming an itemized deduction for medical expenses on your tax return.

This includes amounts for Medicare Advantage and Medigap plans. Because Medicare Parts A and B don’t cover all of the health care expenses, some people buy Medigap policies. Cover gaps include deductibles, co-insurance, co-payments, and other costs. Medigap is private supplemental insurance that is intended to cover some or all gaps.

Medical Expense Deduction Basics

Seniors can deduction medicare premiums in addition to various medical expenses such as the following:

  • Eyeglasses and contacts
  • Qualified long-term care services
  • Prescription medications
  • Dental treatment, including dentures
  • Ambulance services
  • Lab tests
  • Hospital services
  • And more

If they qualify, there are many items that can be written off for tax purposes that medicare does not cover. Additionally, you can deduct transportation expenses to get to medical appointments. And if you travel by car, there are two methods for calculating this deduction. For instance, you can use the flat 22-cents-per-mile rate. Or you can keep track of your actual out-of-pocket expenses for gas, oil and repairs.

Qualifying For Medical Expense Deductions

Since many people no longer itemize, qualifying for a medical expense deduction may be difficult for a few reasons. First, you can deduct medical expenses but only if you itemize deductions and only to the extent that total qualifying expenses exceeded 7.5% of adjusted gross income.

For 2023, the standard deduction amounts are $13,850 for single filers. $27,700 for married couples filing jointly. And $20,800 for heads of household. However, if you have significant medical expenses, including medicare health insurance premiums, you may itemize and collect some tax savings.

We Can Help

Contact us if you have questions about whether seniors can deduct medicare premiums or any tax questions about your medical expense deductions. We can help determine the optimal overall tax-planning strategy based on your situation.

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