You generally can’t deduct your Medicare premiums pretax, but you can include them in your yearly itemized deductions.

Health insurance premiums are one of the many medical expenses the Internal Revenue Service (IRS) allows you to deduct from your yearly taxes.

Generally, the IRS allows you to deduct any medical expenses exceeding 7.5% of your AGI. Your AGI is the amount you make in a year after all taxes are taken out.

But, when it comes to Medicare premiums specifically, how you deduct from your taxes matters. Read on to learn more about how to deduct Medicare premiums from your taxes.

Unlike premiums for insurance plans you get through an employer, Medicare premiums are generally not considered pretax.

This means premiums aren’t taken out of your wages before they’re taxed. Instead, you’ll need to deduct Medicare premiums when you file your taxes.

This is true even if you pay your premiums with your Social Security retirement benefits check.

The rules for premium deduction can also depend on your specific circumstances, including your income and employment status.

In general, you can deduct:

  • Part A premiums: Most people get Part A without paying a premium, so there isn’t anything to deduct. You can deduct the amount if you do pay a Part A premium and aren’t getting Social Security benefits.
  • Part B premiums: Part B premiums are tax-deductible if you meet the income rules.
  • Part C premiums: You can deduct Part C premiums if you meet the income rules.
  • Part D premiums: As with parts B and C, you can deduct your Part D premiums if you meet the income rules.
  • Medigap: Medigap premiums can also be tax-deductible.

You can deduct your Medicare premiums in a few steps. It’s important to take your time at each step to ensure you don’t miss out on any tax savings.

Documents

If you pay Medicare premiums via Social Security, you’ll get an SSA-1099 annually showing your Part B premiums. You’ll also receive a Medicare summary notice (MSN) every three months, detailing services, Medicare payments, and your billing.

This information is also accessible anytime via your MyMedicare account. Use your SSA-1099 and MSN to determine total medical expenses for your tax itemized deduction, referred to as Schedule A.

Here are the steps for discovering the amount you can deduct for your healthcare expenses:

  1. Determine your AGI for the year.
  2. Gather all medical receipts, SSA-1099, summary notices, and insurance statements.
  3. Add up the money you spent on your own healthcare for the year.
  4. Use IRS Form 1040 or 1040-SR.
  5. Enter your Medical expenses on lines 1 through 4 of the Form 1040 or 1040-SR. The form will walk you through calculating 7.5% of your AGI and then subtracting that number from your total medical expenses.
  6. You can deduct the amount you paid for medical expenses over 7.5% of your AGI.

For example, say you have an AGI of $40,000. When you add up all your medical expenses from your SSA-1099, summary notices, receipts, and other statements, you get a total of $6,000.

So, you could deduct $3,000 of those medical expenses: 7.5% of $40,000 is $3,000, and $6,000 minus $3,000 is $3,000.

Can I deduct Medicare Part B premiums on my taxes with TurboTax?

Yes. You can enter the Medicare Part B premiums you paid the previous year as an itemized medical expense on your tax return in TurboTax.

What if I have a Part C, Part D, or Medigap plan?

You’ll receive separate statements from any privately sold Medicare plan you have — including Part C, Part D, and Medigap — unless you pay for any of them out of your Social Security benefits.

If you pay using Social Security, you’ll receive information on an SSA-1099. Otherwise, you’ll receive a statement from your insurance company. Call your insurance company if you haven’t received the information you should.

Your ability to deduct your premiums depends on your AGI and the amount you pay for your premiums. For example, let’s say your AGI was $20,000. You can deduct any medical expense over 7.5% of your income, which in this case is $1,500.

You might have also spent money on medical expenses like:

If so, you can deduct even more from your taxes.

Remember, you can deduct any medical expense you pay that’s more than 7.5% of your income.

That means you’ll need to add up all the expenses from your SSA-1099, summary notices, and any receipts to figure out how much you paid toward your medical care during the tax year.

Your healthcare deductions work differently if you’re self-employed. Self-employed beneficiaries can deduct their premiums before taxes, which is known as an “above-the-line” deduction.

Taking out premiums before taxes lowers your AGI, allowing you to deduct even more medical expenses. Plus, the IRS also allows you to deduct your Medicare premiums pretax for your spouse.

You’re considered self-employed if you own a business that earns income, even if you’re a sole proprietor.

So, for example, if you’re doing freelance consulting work in retirement, you could deduct your Medicare premiums pretax. If your business didn’t earn you any income, you can’t deduct your benefits pretax.

Deducting premiums pretax means serious tax savings for many people, but that might not be true in all situations. You can choose not to deduct your premiums pretax and instead deduct them as itemized Schedule A deductions at tax time.

If you’re self-employed, you can use online tools to compare your taxes with pretax versus itemized deductions.

What if I work and am not self-employed?

You can use Schedule A to deduct your premiums if you still work for an employer but have Medicare.

You can itemize all your medical expenses, including premiums. The same AGI rules apply regardless of your income source.

The following resources can help with your taxes or give you more information:

Typically, you can deduct medical expenses from your taxes if they exceed 7.5% of your AGI, which is your yearly income after taxes.

However, the method of deduction is important when it comes to Medicare premiums. Unlike premiums from employer-provided insurance plans, Medicare premiums are usually not considered pretax.

This means they aren’t deducted from your wages before taxes are applied. Instead, you must deduct Medicare premiums when you file your tax return.