Medicare Part B premiums are tax-deductible, but whether you actually get a tax benefit depends on how you file. Self-employed retirees can deduct the full annual premium (currently $2,434.80 at the standard 2026 rate of $202.90 a month) directly from income without itemizing. Everyone else has to itemize on Schedule A and clear a high medical-spending threshold that most people never reach.
Deducting Part B as an Itemized Medical Expense
The IRS treats Part B premiums as a qualified medical expense. You add them to your other out-of-pocket medical costs for the year and claim the total on Schedule A, but only if you itemize instead of taking the standard deduction.
Only the portion of your medical spending that exceeds 7.5% of your adjusted gross income is deductible. Everything under that floor is lost.
An example makes the math concrete. If your AGI is $60,000, you need more than $4,500 in medical expenses before any of it counts. Pay $2,434.80 in Part B premiums and rack up another $2,500 in other medical costs, and your $4,934.80 total only beats the floor by $434.80. That $434.80 is your deduction, even though you spent nearly $5,000.
Qualified expenses you can stack with your Part B premiums include prescription drugs, dental work, hospital stays, vision care, copayments, and premiums for Part C, Part D, and Medigap. Voluntary Part A premiums count too, if you had to buy into Part A because you lacked the work credits to get it free. The payroll taxes you paid toward Medicare during your working years are not deductible.
Why Most Retirees Get No Benefit From Itemizing
Even when your medical expenses clear the 7.5% floor, itemizing only helps if your total itemized deductions beat the standard deduction. For 2026, the standard deduction is $16,100 for single filers, $24,150 for heads of household, and $32,200 for married couples filing jointly.
Medicare-age taxpayers get a bump on top of that. If you’re 65 or older, you add another $2,050 as a single filer, or $1,650 per qualifying spouse on a joint return. A single filer over 65 starts at $18,150, and a married couple where both spouses are 65 or older starts at $35,500. Your itemized total (medical expenses plus state and local taxes, mortgage interest, charitable giving, and anything else that qualifies) has to top that number before itemizing saves you a cent.
That’s why the medical expense deduction is largely a nonevent for most retirees. It tends to matter in years with heavy, unusual spending: a major surgery, a long hospital stay, significant dental work.
The Self-Employed Health Insurance Deduction
If you report net profit from a business, the rules change in your favor. You can deduct 100% of your Medicare Part B premiums as an adjustment to income on Schedule 1 of Form 1040. It’s an above-the-line deduction, so it reduces your AGI directly. No itemizing, no 7.5% floor.
This deduction is open to sole proprietors, partners with net self-employment earnings, and S-corporation shareholders who own more than 2% of the stock. Premiums for Parts A, C, and D and for Medigap qualify under the same rule.
Two limits apply. The deduction can’t exceed your net earnings from the business sponsoring the plan, so if your business breaks even or loses money, you get nothing. And you can’t claim the deduction for any month in which you were eligible to join a subsidized health plan maintained by any employer, including a spouse’s. Eligibility is the trigger, not whether you actually enrolled.
You calculate the deduction on Form 7206, which flows to Schedule 1, line 17. Any premiums that exceed your earned-income cap can still go on Schedule A as an itemized medical expense, subject to the usual 7.5% floor. Just don’t double-count: dollars claimed on Schedule 1 cannot also appear on Schedule A.
S-Corporation Owners
If your business is an S-corporation, the plumbing matters. The S-corp has to either pay your Medicare premiums directly or reimburse you, and the amount has to show up as wages in Box 1 of your W-2. Skip that step and you lose the deduction entirely. Those wages aren’t subject to Social Security or Medicare payroll taxes, so the W-2 reporting doesn’t cost you anything in FICA. One other difference: for a more-than-2% shareholder, the deduction is capped at your W-2 wages from the corporation, not business profit.
IRMAA Makes the Deduction Bigger
Higher-income beneficiaries pay more than the standard premium through the Income-Related Monthly Adjustment Amount. For 2026, IRMAA kicks in above $109,000 for individual filers and $218,000 for joint filers (measured against your modified AGI from two years prior). At the top tier, the monthly Part B premium reaches $689.90, or $8,278.80 for the year.
The surcharge is treated as part of your Part B premium for tax purposes. The full amount you pay counts as a deductible medical expense, which materially improves your odds of clearing the 7.5% floor if you itemize. Self-employed filers can deduct the IRMAA-inflated premium in full on Schedule 1.
HSA Funds Are a Separate Tax Break
If you still have money in a Health Savings Account from your pre-Medicare years, you can use it to pay Part B, Part D, and Medicare Advantage premiums tax-free after age 65. The withdrawal counts as a qualified medical expense and avoids both income tax and the 20% penalty that would otherwise apply to a non-medical HSA distribution. Medigap premiums are the exception: paying them out of an HSA makes the withdrawal taxable as ordinary income, though the 20% penalty is off the table after 65.
You can’t take both tax breaks on the same dollar. Premiums paid with tax-free HSA money cannot also be deducted on your return. For retirees who take the standard deduction anyway, HSA withdrawals are usually the better choice: the tax break is guaranteed, while the itemized deduction requires clearing two separate hurdles.
Documenting What You Paid
If your Part B premiums are withheld from your Social Security check, the total for the year appears on Form SSA-1099, which arrives in January. That’s your primary record. If you pay Medicare directly through quarterly bills or bank withdrawals, hold onto payment confirmations or bank statements. Part D and Medicare Advantage plans typically send an annual premium summary.
Self-employed filers should track premiums separately from other medical spending from the start. The self-employed share goes on Form 7206; only the overflow belongs on Schedule A. Running the same premiums through both forms is the most common mistake in this area and a reliable way to draw an IRS notice.