Hi Lindsay, I have Medicare supplemental insurance under Plan-F. Although you replied to Peggy that such a premium is deductible. However, I would like to ask you to indicate where I can enter this amount in my 1040-SR. I claim the standard deduction in 2020. But Medicare bought Plan-F in January 2021. Taxes are intimidating for most of us, bringing with them changes in form, new laws and a host of other changes every year that seem to further complicate the process. Whether you file your return yourself or seek the help of a tax professional, if you are self-employed and pay health insurance premiums, being able to deduct the cost of those premiums can help your bottom line. Hello, Lindsay, In addition to a premium for my Medicare supplemental policy, I also pay a second premium for drug coverage. Is it also deductible if I am self-employed? Thank you. However, if you have significant medical expenses, including Medicare health insurance premiums, you can list and collect tax savings. The IRS provides a list of deductible medical expenses. The list contains some items that you may not expect.

These points include the cost of modifying your home to install medical equipment and transportation costs. Hello Paul! Yes, you can also deduct your rewards from Part D. Prior to 2010, no Medicare premiums were deductible under the self-employed health insurance deduction. From 2010 to 2012, only partial B premiums were deductible. But starting in 2012, premiums for Medicare A, B, C, and D, as well as Medigap/Medicare Supplement, became deductible as part of the self-employed health insurance deduction. Self-employed workers (who make a profit from self-employment) are allowed to deduct their health insurance premiums from Schedule 1 of 1040 as an “above the line” deduction – meaning this reduces their AGI. “If you`re a small business making money, the initial deduction reduces your income. This is usually the best tax advantage. But if your business is marginal and your Medicare premiums result in a loss, you may be limited (with the deduction of self-employed health insurance), but you can list. Tags: Medicare premiums, self-employment, tax deductions Yes, your monthly Medicare Part B premiums are tax deductible.

In addition to health insurance premiums, you can deduct various medical expenses, including those for dental treatments, ambulance services, dentures, glasses and contact lenses, hospital services, laboratory tests, qualified long-term care services, prescription drugs and others. If you`ve worked enough quarters, don`t write a check for your Part A bonus. It comes from your Social Security check. Get your SSA-1099 from the Social Security Administration to keep an eye on these costs. If you haven`t worked the necessary 40 quarters and don`t get Part A without a premium, your Part A premiums may be tax deductible. I had my plan for Medicare Full Extra Help (you pay a $0 premium, a $0 deductible, and a $3.70 to $9.20 co-payment for medications) In 2012, the IRS decided that Medicare premiums that cover the self-employed — as well as their spouse, loved ones, and children under the age of 27 — are deductible. Since 2012, the IRS has allowed the self-employed to deduct all Medicare premiums (including Medicare Part B – and Part A premiums for people who have to pay a premium for it – Medigap, Medicare Advantage plans, and Part D) from their federal taxes, and this includes Medicare premiums for their spouse. If you plan to register, you can include out-of-pocket medical expenses that exceed 7.5% of your adjusted gross income (GII). Your Medicare premiums, deductibles, co-insurance, and co-payments may all count towards your total medical expenses, as well as other medical costs that may not be covered by Medicare at all, such as dental, vision, hearing, and long-term care expenses.

Nearly 64 million Americans are enrolled in Medicare. And while most of the program`s costs are covered by payroll taxes and general income, participants cover about 15 percent of Medicare costs with the premiums they pay each month. These premiums can certainly accumulate over time. But unlike the employer-sponsored coverage that most Americans have during their working years, Medicare premiums are generally not paid with input tax money. Medigap premiums are subject to tax deductions. When it comes tax season, Medicare supplement premiums are treated as a standard medical expense. Hello Peggy! Yes, your Plan F premiums will be treated as standard medical expenses. You can`t continue to contribute to your HSA after you enroll in Medicare, but you can still withdraw money from your HSA. As long as you use them for an eligible medical expense that includes premiums for Medicare Parts A, B, C, and D, you don`t have to pay taxes on the money. (Note that other types of health insurance premiums generally cannot be paid with tax-free HSA money.) Note: Self-employed individuals and shareholders of S companies can typically claim a deduction above the line for their health insurance premiums, including Medicare premiums. So you don`t need to sign up to get the tax savings from their premiums.

If you started your business as an S company, the company can either pay your Medicare premiums directly on your behalf (and count them as a business expense) or reimburse you for the premiums, with the amount included in your gross salary shown on your W2, and you can then deduct it on Schedule 1 of your 1040. The purpose of standard tax deductions is to allow taxpayers to claim the standard amount set by the IRS. They can claim this amount for deduction if they have not broken down the deductible expenses. This amount changes from year to year, and the IRS website has a tool that allows you to calculate your standard deduction. But deducting health insurance for the self-employed isn`t the only way to deduct your Medicare premiums. You may be able to include them in your Schedule A as a one-time deduction instead. (Unique impressions don`t reduce your AGI.) But you can`t do both, because “double soaking” is never allowed when it comes to taxes. Medigap rewards are considered medical expenses and follow the guidelines for this type of deduction. Medical expenses are only deductible if they are reported by the taxpayer on their personal income tax return. Everyone with a Part B pays a premium, and the premiums are tax deductible. Jools, We recommend that you contact a tax advisor or the IRS for advice on your specific situation. But just in case your company is incorporated as an S-Corp: To deduct the premiums (Medicare or otherwise), the S-Corp must either pay them directly or compensate you and add the amount to your W2.

If your business is set up this way, it`s possible that it could lead to confusion. Here are the IRS details: www.irs.gov/pub/irs-wd/1228037.pdf If you`re self-employed, deducting self-employed health insurance — your Medicare premiums on Schedule 1 of your 1040 — is the most direct way to reduce your tax burden. And as mentioned above, this is an “above the line” deduction, which means it reduces your adjusted gross income. But you can`t deduct more premiums than what your company earned during the year. Hi Jack! According to TaxAct, you can only deduct premiums if Company S reports the premiums paid or reimbursed as salary in box 1 of your Form W-2 and you also report the premium payments or refunds as wages on Form 1040 or 1040-SR, line 1. Not all Medicare supplement expenses apply to tax deductions. Although the cost of Medigap premiums is tax deductible, not all expenses are deductible. If you have a Health Savings Account (HSA), you know that you can withdraw tax-free money from the account and use it to pay your premiums for Medicare Parts A, B, C, and D (but not Medigap premiums). .