Many health insurance premiums are tax-deductible, including the ones you pay for Medicare.

Premiums are one of the many medical expenses the IRS allows you to deduct from your yearly taxes. You can deduct all medical expenses over 7.5% of your adjusted gross income (AGI).

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

Unlike premiums for insurance plans you get through an employer, Medicare premiums are generally not considered pretax. Pretax deductions are those taken out of your wages before it’s taxed.

For example, if you have a plan through your employer that costs $85 per paycheck, that $85 is taken out of your total pay before taxes are. So, if your total check is $785, you’ll have $85 taken out for insurance. Then, you’ll pay taxes on the remaining $700.

You’ll need to deduct Medicare premiums when you file your taxes, even if you pay your premiums by having the money deducted from your Social Security retirement benefits check.

The rules for deduction depend on your specific circumstances, including your income and employment status. Your income and circumstances can also affect which Medicare premiums you can deduct.

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.

If you pay your premiums through Social Security, you’ll receive a form called SSA-1099 each year. The SSA-1099 will show the premiums you paid for Part B, and you can use this information to itemize your premiums when you file your taxes.

You’ll also receive a form from Medicare called a Medicare summary notice. A summary notice lists all the services you received, what Medicare paid for them, and the amount billed to you.

Medicare sends summary notices every three months. If you have a MyMedicare account, you can access this information anytime.

You can use the information on your SSA-1099 and summary notices to calculate the amount you paid in Medical expenses.

The IRS allows you to include costs for services that Original Medicare (parts A and B) doesn’t cover, such as:

Keep your bills and receipts from these services. You’ll need them to determine your total medical expenses for the year.

When you file your taxes, you’ll list these expenses, along with your premiums, as what’s called an itemized Schedule A deduction.

What if you 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.

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. This includes the deductibles you pay for Medicare or any other insurance.

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.

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.

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.

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.

How to find help with your taxes if you’re on Medicare

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

  • Tax Counseling for the Elderly (TCE): The TCE provides free tax preparation help from IRS-certified volunteers. You can find a local office by calling 888-227-7669.
  • Volunteer Income Tax Assistance (VITA): Like the TCE, this service provides free tax preparation help. You can reach them by calling 800-906-9887.
  • IRS service locator: Find a local TCE or VITA provider on the IRS website.
  • Taxpayer Assistance Centers (TACs): You can make an appointment at TACs to get answers to your questions.

You can deduct premiums for any part of Medicare, including Medigap. However, you can only deduct amounts that are more than 7.5% of your AGI.