Yes. Self-employed individuals can deduct Medicare premiums as a business expense or above-the-line deduction, reducing taxable income on their federal return.
Do Medicare premiums count as income?
No. Medicare premiums paid by individuals are not counted as taxable income.
That means you don’t report your Medicare premiums as income on your federal tax return. (Honestly, this is one less thing to worry about.) If you itemize deductions, though, you can include premiums as part of your total medical expenses. The IRS generally allows a deduction for medical expenses that exceed 7.5% of your adjusted gross income (AGI). For example, if your AGI is $60,000, you can deduct medical expenses over $4,500—including Medicare premiums.Source: IRS Publication 502
Can you deduct Medicare Part B premiums from your taxes?
Yes. Medicare Part B premiums are tax-deductible medical expenses.
If you itemize deductions, you can include your monthly Part B premiums as part of your total medical expenses. For 2026, the standard Part B premium is $174.70 per month. Over a year, that totals $2,096.40. If your total medical expenses exceed 7.5% of your AGI, you can deduct the excess amount.Source: Medicare.gov
Can health insurance premiums be deducted?
Yes, but only under specific conditions.
If you pay for your own health insurance, you may deduct the premiums as a medical expense—if you itemize deductions. Alternatively, if you’re self-employed, you may qualify for the self-employed health insurance deduction. That’s an above-the-line deduction, so you can deduct the premiums without itemizing.Source: IRS Topic No. 502
How does Medicare work for self-employed?
Self-employed individuals can deduct Medicare premiums as a business expense or above-the-line deduction.
Sole proprietors and single-member LLCs can deduct Medicare premiums on Schedule C or directly on Form 1040. The premiums can cover you, your spouse, and dependents. For example, if you pay $2,500 per year in Medicare premiums, you can deduct that amount, reducing your taxable income.Source: IRS Schedule C Instructions
What income is used to determine Medicare premiums?
Medicare premiums are based on your modified adjusted gross income (MAGI).
MAGI includes your adjusted gross income (AGI) plus tax-exempt interest and certain other income sources. Social Security uses your most recent tax return on file with the IRS to determine your MAGI. For example, if your AGI is $50,000 and you earned $1,000 in tax-exempt interest, your MAGI is $51,000.Source: Social Security Administration
Can you deduct health insurance premiums without itemizing?
Yes, if you are self-employed, you can deduct health insurance premiums without itemizing.
The self-employed health insurance deduction is an above-the-line deduction, meaning it reduces your income before calculating AGI. That said, it doesn’t reduce your Social Security or Medicare tax liability. For example, if you’re self-employed and pay $3,000 in health insurance premiums, you can deduct that amount directly on Form 1040.Source: IRS Topic No. 751
How do you deduct Medicare as a business expense?
Sole proprietors and single-member LLCs can deduct Medicare premiums as a business expense on Schedule C.
After you’ve listed income and expenses, the premiums can go under “Other Expenses” on Schedule C. For example, if you pay $2,200 per year in Medicare premiums, you can deduct that amount, reducing your taxable income. If your business is an LLC taxed as a partnership or corporation, check with a tax pro—those rules differ.Source: IRS Schedule C Instructions
Are you automatically enrolled in Medicare if you are on Social Security?
Yes. If you are receiving Social Security benefits at age 65, you are automatically enrolled in Medicare Parts A and B.
Enrollment typically starts three months before your 65th birthday. You’ll get a Medicare card in the mail. If you don’t want Part B, you must opt out. For example, if your birthday is in June 2026, you’ll be automatically enrolled in March 2026.Source: Medicare.gov
Is Social Security included in MAGI for Medicare premiums?
Social Security benefits are included in MAGI only if they are taxable.
MAGI includes taxable Social Security benefits, tax-exempt interest, and other income sources. For example, if you receive $18,000 in Social Security benefits and $2,000 of that is taxable, only the taxable portion counts toward your MAGI. Supplemental Security Income (SSI) doesn’t count at all.Source: IRS Publication 915
What is the MAGI for Medicare for 2021?
For 2021, individuals with a MAGI of $88,000 or more and married couples filing jointly with a MAGI of $176,000 or more paid higher Medicare Part B premiums.
That was the 2021 threshold. By 2026, those numbers have been adjusted for inflation. For the most current income brackets, head to Medicare.gov.Source: Medicare.gov
What deductions can you claim without itemizing?
You can claim several deductions without itemizing, including self-employed health insurance and IRA contributions.
Other common above-the-line deductions include health savings account (HSA) contributions, retirement plan contributions for the self-employed, and student loan interest. For example, if you contribute $3,500 to an IRA and $2,000 to an HSA, you can deduct both amounts directly on Form 1040.Source: IRS Publication 505
- Self-employed health insurance
- Health savings account (HSA) contributions
- Retirement plan contributions by self-employed taxpayers
- IRA contributions
- 50% of self-employment taxes
- Penalty on early savings withdrawals
- Student loan interest
- Tuition and fees
David Okonkwo holds a PhD in Computer Science and has been reviewing tech products and research tools for over 8 years. He's the person his entire department calls when their software breaks, and he's surprisingly okay with that.