Are Medicare Advantage Premiums Tax Deductible?

Mike Olmos by Mike Olmos | Licensed since 2010
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This article was updated on: 09/15/2018

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What is a tax deduction?

If you meet certain conditions set by the Internal Revenue Service (IRS), you may be able to get a tax deduction for your Medicare Advantage premiums. According to the IRS, you subtract your tax deductions from your income before you calculate the amount of tax you owe. The more deductions you have, the less you may owe in taxes.

What is a Medicare Advantage plan?

If you have Original Medicare (Part A and Part B), you may have an option to get your Medicare benefits in another way through a Medicare Advantage plan, offered by a Medicare-approved private insurance company. Medicare Advantage must cover everything Original Medicare covers, except for hospice care, which is still covered by Original Medicare Part A. Some Medicare Advantage plans may offer extra benefits, such as routine dental care, routine vision care, and prescription drug coverage. With Medicare Advantage you must continue to pay your Part B premium.

How much are my Medicare Advantage premiums?

If you have a Medicare Advantage plan you could be paying two premiums: Your Medicare Part B premium and an additional premium changed by the private insurance company that administers your plan. The Medicare Advantage premium amount varies from plan to plan. While some Medicare Advantage plans may offer a $0 monthly premium, you still usually can’t get out of paying your Part B premium. The standard Part B premium is $134 monthly in 2018. (The amount you pay might be different; read more about the Part B premium.)

How can I get a tax deduction for my Medicare Advantage premiums?

When you are paying your taxes to the Internal Revenue Service (IRS), you have a choice to take a standard deduction or itemize your tax deductions. In order to get a tax deduction for your Medicare Advantage Premium (or Medicare Part B premium) you must itemize your tax deductions.

The IRS says that you can deduct certain medical and dental expenses for yourself if you itemize deductions on Schedule A (Form 1040). The IRS has a long list of acceptable and unacceptable items under the category of medical and dental expenses. One item you might be able to include is medical and hospital insurance premiums, which might include Medicare Advantage premiums.

Keep mind there are income limitations on itemizing tax deductions. According to the IRS, you may not be able to deduct all your itemized deductions if your adjusted gross income is more than a certain amount. Check the IRS web site or talk to a tax preparer for details.

Generally, you may be able to deduct only the amount of your medical and dental expenses that is more than 7.5% of your adjusted gross income.

The IRS defines adjusted gross income (AGI) as gross income minus adjustments to income. You can refer to your past income tax return to get a quick estimate of your AGI.

Let’s say your AGI is $60,000. Seven and a half percent of that would be $4,500. Depending on your age, you are only allowed to deduct the amount that exceeds this amount. If your total allowable medical expenses for the year are $5,000, you might be able to deduct $500 ($5,000 – $4,500 = $500).

Would you like to know more about Medicare Advantage premium tax deductions? I’d be happy to help you. I can walk you through your options or email you information; you can request that using the links below. Or take a look at plans by clicking the Compare Plans buttons on this page.

This article should not be relied on tax advice.  Please consult a tax advisor who understands your particular circumstances in order to see what, if any, part of your medical expenses may be tax deductible. This article is for general information and might not be updated after publication.

Benefits, premiums and/or copayments/co-insurance may change on January 1 of each year.

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