Are Medicare Premiums Deductible in 2019?
Understand the specific criteria for deducting Medicare premiums on your 2019 tax return and the steps to claim them.
Medical expenses can offer a tax benefit for individuals who meet certain criteria, potentially reducing their taxable income. For the 2019 tax year, specific rules applied to the deductibility of these costs, including premiums paid for various Medicare plans. This article provides information regarding the deductibility of Medicare premiums for the 2019 tax year.
Eligibility for Deduction
To deduct Medicare premiums, taxpayers must itemize their deductions on Schedule A (Form 1040), rather than taking the standard deduction. This means their total itemized deductions, including medical expenses, must exceed the standard deduction amount for their filing status in 2019. Only out-of-pocket medical expenses, which include qualifying Medicare premiums, can be considered for this deduction.
A significant condition for deducting medical expenses in 2019 was the Adjusted Gross Income (AGI) threshold. Taxpayers could only deduct the amount of medical expenses that exceeded 7.5% of their AGI. For example, if a taxpayer’s AGI was $50,000, they could only deduct medical expenses above $3,750.
The deductible medical expenses can include those paid for the taxpayer, their spouse, and their dependents. These expenses must not have been reimbursed by insurance or other sources.
What Medicare Premiums Qualify
Several types of Medicare premiums generally qualified as deductible medical expenses for the 2019 tax year. Premiums paid for Medicare Part B, which covers medical insurance, were typically deductible. Similarly, premiums for Medicare Part C, known as Medicare Advantage plans, could be included. Premiums paid for Medicare Part D, covering prescription drug costs, also qualified for deduction.
Medicare Part A premiums, which cover hospital insurance, were generally not deductible for most beneficiaries. This is because most individuals do not pay a premium for Part A if they or their spouse paid Medicare taxes through employment for a sufficient period. However, if an individual was not eligible for premium-free Part A and voluntarily paid a monthly premium for it, those specific premiums could be deductible.
Premiums for supplemental insurance policies, such as Medigap plans, could also be counted as deductible medical expenses. These plans help cover costs not paid by original Medicare, like co-payments, deductibles, and coinsurance.
How to Claim the Deduction
After determining eligibility and totaling all qualifying medical expenses, including Medicare premiums, taxpayers reported these amounts on Schedule A (Form 1040). This form includes a dedicated line for medical and dental expenses.
Taxpayers would first sum all their unreimbursed medical expenses for the year, including all qualifying Medicare premiums. Then, they would calculate 7.5% of their Adjusted Gross Income. The amount entered on Schedule A was the total medical expenses that exceeded this 7.5% AGI threshold.
Accurate records are important to support any claimed deductions. This documentation should include statements showing Medicare Part B premiums, such as Form SSA-1099, and statements from private insurance providers for Medicare Advantage, Part D, or Medigap premiums.