Understanding Medicare can be overwhelming, to say the least. Not only are you transitioning to another type of insurance, you also find yourself concerned about everything from what is covered for your specific health concerns to how much premiums cost. After you choose a plan that suits your lifestyle and other insurance options, you might start wondering if you can write off any of your payments when filing your taxes.
The good news is that if you work with an accountant or tax specialist, you won’t have to worry too much about the ins and outs of what you can claim when it comes to Medicare. However, if you file your own taxes, or if you just want to be informed and empowered, it can be wise to at least know a bit about Medicare and what can be considered tax deductible.
Your Medicare Premiums
When it comes to the monthly premium that you pay for Medicare coverage, you are able to itemize and write off certain costs. Your premiums for Medicare Part B, C, and D are eligible to be tax deductible. You can write these costs off as medical expenses on your tax form, and if you rack up enough it might be worth it to itemize your costs.
Your Supplemental Care Premiums
If you have opted to purchase Medigap coverage, or supplemental insurance through a private company vetted by Medicare, you can also deduct these monthly premiums as an eligible medical expense on your taxes.
Other Medical Expenses
Your Medicare and other insurance premiums are not the only possible items that you can claim on your taxes. Medical expenses, such as any out of pocket costs incurred after Medicare paid its amount, are able to be itemized as well. This can include prescription drugs or even out of pocket skilled nursing costs.
What’s the Catch?
You can deduct the premiums previously discussed only if you itemize your taxes on a 1040 form. Further, in order to meet eligibility, your costs must exceed 7.5% of your adjusted gross income. It is certainly worth it to consider itemizing, especially if you have had an expensive year when it comes to medical expenses. If you are still unsure if itemizing is the way to go, or if you should investigate claiming Medicare premiums further, contact your tax professional or your city’s senior center for help and guidance. Social Workers and Accountants who are experienced with senior specific tax information can give you advice based on your particular situation and conditions, giving you an individualized road map based on your unique place in life.
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