Are Medicare Plan N insurance premiums deductible?

[Kathy4]

I understand that Medicare Part B and Part D insurance premiums are deductible in the SSA section for taxpayers who aren't self-employed, and I entered those amounts from my SSA-1099. In addition, I have a Medicare Plan N Supplemental policy and pay the monthly premiums from my checking account. Are those premiums also deductible, and if so, where would I enter them? My husband is self-employed, so I know his premiums are entered as a business expense, not where mine are, but I also need to know if his supplemental plan is deductible or not, if his answer would be different because of filing Schedule C. 

[MinhT1 · Accepted solution]

1. For yourself

Medicare Plan N premiums are deductible as Medical expenses.

You can claim all medical and dental bills, prescription drugs and health insurance premiums paid out-of-pocket as Medical Expenses in Schedule A - Itemized Deductions

For tax year 2023, Medical Expenses are subject to the 7.5% rule and you can only claim the excess over 7.5% of your Adjusted Gross Income.

Please note that Itemized Deductions will only benefit your taxes when they exceed your standard deduction.

For tax year 2023, standard deductions are:

• $27,700 for married couples whose filing status is “married filing jointly” and surviving spouses;
• $13,850 for singles and married couples whose filing status is “married filing separately”; and
• $20,800 for taxpayers whose filing status is “head of household.”

The additional standard deduction for a blind taxpayer—i.e. a taxpayer whose vision is less than 20/200— and for a taxpayer who is age 65 or older at the end of the year is for each instance:

• $1,500 for married individuals; and
• $1,850 for singles and heads of household.

In TurboTax Online, you can enter Medical expenses by following these steps:

1. Open your tax return
2. Click on the down arrow on the right of Federal in the left-hand column, then on Deductions & Credits
3. Locate the section Medical and click on the arrow on the right 
4. Click Start next to Medical Expenses.

2. For your self-employed husband:

His Medicare Plan N premiums are deductible as Self-employed Health insurance.

In TurboTax Online Premium, you enter his health insurance premiums in the Business Expenses section of his business.

The deduction is limited to the amount of net income (profit) of your business.

Go to Business Expenses > Other Common Business Expenses > Health Insurance Premiums.

TurboTax will transfer the amount to Part II line 17 of Schedule 1 of form 1040 (self-employed health insurance deduction).

[Kathy4]

This is extremely helpful. A follow-up question. My Part B and Part D premiums were deducted from Social Security, so those were entered. I paid the premiums for the Supplemental plan from my checking account. Do I just add the supplemental amount on the line that already reflects the amount withheld from Social Security? I'm asking because the total then would not equal what was reported on SSA-1099. Wondering if that would flag in the IRS system.

[MinhT1 · Accepted solution]

For convenience, you can add the Medicare Plan N premiums to the Medicare Part D and enter the total as Medicare Part D. TurboTax will report the total correctly in Medical expenses. This wouldn't be a flag for the IRS as everything is reported correctly.

But remember that for your husband, all medical insurance premiums must be entered as Self-employed medical insurance as indicated in my previous answer.