He enters the $1,000 he paid for Medicare and supplemental insurance on line 3 instead of line 1 because he was eligible for Medicare at the time he paid the premiums. This means that your itemized deductions need to exceed 12,950 if you’re a single filer (or 25,900 for a joint-filer) for it to make financial sense to itemize. When completing his Unreimbursed Health Care Expenses Worksheet, David enters the $600 in ACA premiums on line 1. Each taxpayer is afforded a 12,950 standard deduction (for married joint-filers, that number is 25,900) for the 2022 tax year. His premiums from July 1 through the end of the year totaled $1,000. Your medical expense deduction is limited to the amount of medical expenses that exceeds 7.5 of your adjusted gross income. He also purchased additional supplemental health insurance. He canceled his insurance through the ACA and instead began to pay Medicare Part B premiums. David paid $100 per month in premiums, totaling $600, for insurance he obtained under the Affordable Care Act (ACA).ĭavid became eligible for Medicare on July 1. However, out-of-pocket healthcare insurance premiums paid by the taxpayer during the part of the year the taxpayer was not eligible for Medicare and/or an employer-paid healthcare plan are fully deductible on line 1 of the Unreimbursed Health Care Expenses Worksheet.Įxample: From January 1 through June 30, David was not eligible for Medicare. These out-of-pocket premiums should be deducted on line 3 of the Unreimbursed Health Care Expenses Worksheet. Generally, out-of-pocket medical insurance premiums paid by the taxpayer during the part of the year the taxpayer was eligible are deductible to the extent they exceed 7.5% of the taxpayer’s federal adjusted gross income.
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