Medicare Supplement Plans: Are They Tax-Deductible? (2024)

Dear Tax Talk,
I receive Social Security but am paying out a supplemental insurance premium of $164, plus dental expenses, because I have no dental insurance. Is any of this deductible? Does the 7.5 percent of total income threshold apply here? Thank you for your time.
— Judy

Dear Judy,
Yes, your supplemental health insurance is deductible as a medical expense on Schedule A, Itemized Deductions, for Form 1040. You can deduct the amount that exceeds a certain percentage of your adjusted gross income, or AGI, and that depends on your age during the year.

If you or your spouse was older than 65 at some point during 2014, then the amount of your deductible medical expenses will be those that exceed 7.5 percent of your AGI. If you are not older than 65, then the threshold amount is 10 percent of your AGI. This is a temporary benefit to seniors; starting with your 2017 tax return, the threshold will go up to 10 percent.

Most taxpayers do not realize that premiums from Medicare supplement plans that are deducted from their Social Security benefits are deductible as a medical expense. I had an inquiry recently regarding deductibility of hearing aids and prescription eyeglasses; be sure to add those to your list if they apply.

Don’t forget the cost of the batteries on the hearing aids, as they can add up quickly. Additionally, you can include mileage to and from your doctor and other health care providers. The mileage rate is 23.5 cents per mile for 2014, and it decreases to 23 cents per mile for 2015. You can also include tolls and parking.

Thanks for the great question and all the best to you.

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