Tax situation for Seniors with Medicare Advantage
What is a Medicare Advantage plan?
If you are under the original Medicare (Part A and Part B), you might have an option to get your Medicare coverage in another way through a Medicare Advantage plan, offered by Medicare-approved private companies. Medicare Advantage plans must cover everything federal Medicare covers except for Hospice care which is still covered by original Medicare Part A. Some MA plans may offer some extra benefits, such as routine vision care, routine dental care, and prescription drug coverage. With Medicare Advantage insurance you must pay your part B premium.
How much are my Medicare Advantage premiums?
If you do have a Medicare Advantage plan, you most likely are paying two premiums: Your Medicare Part B premium and an additional premium charged by the private insurance company that administers your plan. The MA premium amount will vary from plan to plan. Some MA plans offer a zero monthly premium, but most likely you won’t be able to get out of paying your Part B premium. The standard Part B premium for 2018 is $134 monthly roughly.
What is a tax deduction?
If you meet the criteria set by the Internal Revenue Service you may be eligible get a tax deduction and your premiums paid for Medicare Advantage plans. The IRS states you can subtract your tax deductions from your income before calculating the amount of tax you owe. The more deductions you have, the less you might owe in taxes. For more frequently asked questions when it comes to healthcare, please view our FAQ page.
How can I get a tax deduction for my Medicare Advantage premiums?
When you are filing your taxes with the IRS, you have a choice to take the standard deduction or itemize your tax deductions. To get a tax break or deduction for your Medicare Advantage premium or Medicare Part B premium, you must itemize your tax deductions. The Internal Revenue states 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 what is accepted and not excepted items under the category of medical and dental expenses. The one piece you might be able to include is medical and hospital insurance premiums, which might consist of your MA premiums.
There are income limitations on itemizing tax deduction. According to the Internal Revenue services website, you may not be able to deduct all your itemized deductions if your adjusted gross income is more than a certain amount. Check with the Internal Revenue Service or talk to a tax preparer for details.
This article should not be relied on for tax advice, and please consult a tax advisor who understands your particular circumstances to see what, if any, part of your medical expenses may be tax deductible.