Are Medicare Prescription Drug Plan Premiums Taxable?
Medicare prescription drug plan premiums are a great way to save money on prescription drugs. Some people may wonder if the premiums can save money on their taxes as well. Before answering this question, some standard disclaimers should apply. The information presented here is not intended to serve as a substitute for the advice of an attorney. It is always best to get the advice of a tax professional.
Medical Expenses Can Be Deducted Under Certain Conditions
If a person needs a medical device, surgery, or other item that is medically necessary to sustain his life or sustain his quality of health he can writer it off on his taxes. The portion that gets written off is the out-of-pocket cost and not the full cost of the item. Keeping good records and the receipts can help a Medicare prescription drug plan recipient sort this out.
Medicare Part D recipients, should however, not start deducting prescription drug costs from just because they want to. The premiums can only be deducted if the recipients meets other conditions.
When Can I Deduct Medicare Prescription Drug Plan Premiums
In order to deduct any insurance expenses, the cost must not be deducted from an employer's paycheck. A person who is self-employed or who pays for his own insurance can deduct Medicare Part D premiums from his taxes, if he itemizes his lists.
A person cannot deduct more than 7.5% of his adjusted gross income as part of Medical expenses as of 2010, although this figure changes frequently. He can also deduct mileage incurred on the cars that were used to go to and from medical facilities for treatment. To make the answer short, most people cannot deduct Medicare Part D from their taxes, but it is possible for someone who is self-employed or pays for his health insurance privately.