Can I Deduct Medicare Costs on My Income Tax?

If you itemize, premiums, copayments and certain other expenses may be deductible.

You may be eligible to deduct Medicare costs such as copayments or premiums if you itemize your income taxes.

Unreimbursed medical or dental expenses may be deductible if they exceed 7.5% your adjusted gross income. Part A premiums can be deducted under certain circumstances. Part B and Part D premiums are generally deductible.

You may also be eligible for a deduction for other health care expenses

Medicare beneficiaries may have to pay for medical expenses beyond what their insurance covers. These could include long-term care, lodging costs and medical treatment. Some of these expenses may be tax deductible, within limits.

Long-term care insurance premiums are not allowed to be deducted. There are limitations. The maximum tax deduction allowed for long-term premiums is $4,350 for individuals aged 61-70. For those aged 71 and above, it is $5,430.

The Medicare Medical Savings account can help you save taxes

You can use a Medicare Medical Savings Account only if you have a high-deductible Medicare Advantage plan, which most people don’t. You don’t have to pay tax on the money you put into an MSA, or any interest that you earn.

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Even if you have such a plan a Medicare MSA is only recommended if you are very healthy and can pay your full deductible.

Get professional tax advice

Like many aspects of tax law, the deductions for Medicare or other health care expenses can be complicated. IRS Publication 502 offers details on medical expense deductions, but it’s a lot to digest.

Also, you need to decide if itemizing deductibles is the best tax strategy overall. Before you claim any deductions, it is a good idea to speak with a tax professional.