Medicare is a national insurance program administered by the Government of the United States. The insurance however has four different parts, which are Part A- Hospital Insurance, Part B- Medical Insurance, Part-C Medicare Advantage Plans and Part D- Prescription drug Plans. Most people opting for the Medicare insurance program always have a question in mind “are Medicare premiums tax deductible?” Read on to know about it.
What is Medicare Part-B
Medicare Part- B is a supplement within Medicare which covers procedures and treatments that are not covered by Part-A. Part-A applies to the treatment received in hospitals and nursing homes. Medicare recipients availing Medicare Part-B insurance must also pay the specified premiums. The premiums are usually deducted from the social security benefits.
A considerable amount of medical expenses might qualify as tax deductible items. It also requires that you itemize the tax deductions. Medicare Part B is a kind of voluntary medical insurance that covers doctors’ services, outpatient hospital care, durable medical equipment and some other medical services and supplies. A part of the Medicare Part B may be deductable on the income taxes. Payment to Medicare Part B is based on the earnings (ranging from $104.90 to $335.70 a month in 2013) and the eligibility date. If the deductions are itemized on Form 1040, schedule A, then Medicare Part B premium is deductible as a medical expense.
Deductibility of Medicare Part-B
The Internal Revenue Service considers part-B premiums as a “medical expense”. The total medical and dental expense greater than 7.5% of the adjusted gross income can be deducted if you itemize your tax deductions.
Claiming of Medicare Part-B
Calculate all the medical expenses for the year including the Part-B premiums and enter the total on Line 1 of IRS Schedule A. By using the lines 2 to 4, you will be able to calculate the total expenses that are deductible.
If you run a business with a considerable profit, then Medicare Part-B premiums are deducted as self-employed health insurance on line 29 of Form 1040.
Medicare Part-B not deductible for the ones working
If you are working, and if you wonder, “are Medicare premiums tax deductible?”, it is a ‘no’ unless the tax that come out of your pay is used to make a payment for the Part-A coverage.
The people in our country who pay for Medicare coverage each month, might be able to claim some of those payments for deduction on their taxes. Few factors that the deduction of taxes depend on are the age of the person, the type of Medicare and if any Social Security benefits are being received.