At one point last fall, the House of Representatives voted to abolish the deduction for medical expenses. In the end, though, the new law actually sweetens this break, and does so retroactively. For 2017 and 2018, you can write off medical expenses to the extent they exceed 7.5% of your adjusted gross income. But note, the previous 10% threshold returns in 2019.
The cost of medical insurance, including Medicare premiums, counts toward this itemized deduction. If you’re self-employed, as a consultant in your semi-retirement, for example, you may have a shot at an even better deal. As long as you are not eligible for medical coverage through a job–either your own or a spouse’s–you can deduct the cost of medical insurance on the face of the Form 1040 even if you don’t itemize. If you qualify, the full cost is deductible, with no 7.5%-of-AGI reduction.
Whether as an itemized deduction subject to the threshold or a self-employed write-off that’s not, qualifying medical costs include part of what you paid for long-term-care insurance. The limits for deducting those premiums in 2017 are age 40 or younger, $410; age 41 to 50, $770; age 51 to 60, $1,530; age 61 to 70, $4,090; and age 71 and older, $5,110.
