Are Medicare premiums tax-deductible, and how can I avail of the benefits?
If you pay premiums and expenses on your own, are medicare premiums tax deductible? Yes, you will have to deduct tax separately by itemizing your expenses and premiums paid. Medicare premiums paid through an employer are considered pre-tax, and they are deducted from salary before tax is calculated.
Your income, employment status, and circumstances also determine which Medicare premiums you can deduct. A broad-spectrum of the deductions are:
- Part A premiums – Normally, you don’t pay any premium for Medicare Part A.
- Part B and Part C, and Part D and Medigap premiums – As long as you meet the income rules, premiums paid for are tax-deductible.
Usually, 15% of retirement benefits usually go towards health care expenses and Medicare premiums in copayments, coinsurance, and deductibles. Out-of-pocket expenses that exceed 10% of gross income are tax deductible. Similarly, healthcare expenses that exceed 7.5% of gross income are tax deductible. Here it would help if itemized your expenses to answer whether medicare premiums are tax-deductible.
Also, the following Medicare expenses that you pay out-of-pocket are tax deductible:
- hospital and skilled nursing care costs,
- outpatient care like doctor visits, ambulance services, and diagnostic tests costs
- prescription medicines
- preventive care costs
- dental, hearing aids, and vision care
- home improvements to stay safe
You benefit from itemizing your health care expenses and Medicare premiums paid and making them tax-deductible. Connect with www.askhpm.com to clear your doubts if medicare premiums are tax-deductible.