Self employed - health insurance premium deduction question

Forum|Forum|8 months ago
February 1, 2026
3 replies
123 views

Greetings,

I'm self-employed and I purchased Medicare Pt. B, a Medigap Plan, and a Part D plan, all of which I'm including in my self employed health insurance deduction. My question is - I paid for the *2026* Part D plan in total, in advance, in December *2025*. Can I deduct that on my 2025 taxes even though it's for 2026 coverage?

(None of these were purchased through the marketplace obviously so I won't receive any 1095-A form).

Thanks in advance!

Bsch4477

Level 15

Edited. See above.

bmoyer

Level 3

Medicare bills in advance, so coverage for Jan is paid in Dec. Are you saying that only 11 months of premiums can be deducted in any given year?

Monikak11

Level 6

No, you can deduct 12 months of premiums.

You generally deduct health insurance premiums in the year you pay them, provided they do not cover a period more than 12 months after the payment date. The general IRS rule for prepaid expenses is that they must be capitalized and deducted over the useful life of the benefit, rather than immediately. However, cash-basis taxpayers can immediately deduct prepaid expenses under the "12 month rule" if the benefit does not extend beyond 12 months, and the right/benefit ends before the end of the following taxable year.

As stated in IRS Publication 538, Accounting Periods and Methods:

Expense paid in advance.

An expense you pay in advance is deductible only in the year to which it applies, unless the expense qualifies for the 12-month rule.

Under the 12-month rule, a taxpayer is not required to capitalize amounts paid to create certain rights or benefits for the taxpayer that do not extend beyond the earlier of the following: