For individuals aged 65 and over enrolled in basic Medicare, the journey to comprehensive health coverage often involves additional premiums.
These extra costs, especially for married couples where both spouses contribute, can represent a substantial financial outlay. However, many taxpayers may be missing out on a significant opportunity for tax relief: the potential deductibility of these Medicare premiums. Understanding the rules surrounding medical expense deductions can unlock valuable tax savings, and we're here to help you navigate this often-complex area of tax planning.
Deducting medical expenses: What counts?
For purposes of claiming an itemized deduction for medical expenses on your tax return, you can combine premiums for Medicare health insurance with other eligible medical expenses. These include amounts for “Medigap” insurance and Medicare Advantage plans. Some people buy Medigap policies because Medicare Parts A and B don’t cover all their health care expenses. Coverage gaps include co-payments, coinsurance, deductibles and other costs. Medigap is private supplemental insurance that’s intended to cover some or all gaps.
Is itemizing required?
Qualifying for a medical expense deduction can be difficult for many people for several reasons. For 2025, you can deduct medical expenses only if you itemize deductions on Schedule A of Form 1040 and only to the extent that total qualifying expenses exceed 7.5% of adjusted gross income.
In recent years, many people haven’t been itemizing because their itemized deductions are less than their standard deductions. For 2025, the standard deduction amounts are $15,000 for single filers, $30,000 for married couples filing jointly and $22,500 for heads of household. (Under The One, Big, Beautiful Bill being considered by Congress, these amounts would increase. If the bill is enacted, the standard deduction will increase for 2025 through 2028 by an additional $1,000 for singles, $2,000 for married joint filers and $1,500 for heads of households.)
Note: Self-employed people and shareholder-employees of S corporations don’t need to itemize to get tax savings. They can generally claim an above-the-line deduction for their health insurance premiums, including Medicare premiums.
What other expenses qualify?
In addition to Medicare premiums, you can deduct various medical expenses, including those for dental treatments, doctor visits, ambulance services, dentures, eye exams, eyeglasses and contacts, hearing aids, hospital visits, lab tests, qualified long-term care services, prescription medicines and others.
There are also many other items that Medicare doesn’t cover that can be deducted for tax purposes if you qualify. And itemizers can deduct transportation expenses to get to and from medical appointments. If you go by car, you can deduct a flat 21 cents-per-mile rate in 2025, or you can keep track of your actual out-of-pocket expenses for gas, oil, maintenance and repairs.
Claim all eligible expenses
Contact your Rudler, PSC advisor if you have any questions about whether you’re able to claim medical expense deductions on your tax return. Contact us at 859-331-1717, we’ll help ensure you claim all the tax breaks you’re entitled to.
RUDLER, PSC CPAs and Business Advisors
This week's Rudler Review is presented by Chris Seitz, Senior Client Accounting Specialist and Heather Davis, CPA.
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