How do Medicare Tax Credits and Deductions Work?
We, myself and spouse, will make ~ $40000 this year. I’m retired and she will retire April 2 this year.
We both have medicare and will lose our Employer’s health insurance plan when my wife retires.
How does the $1209.00/month tax credit for health insurance work?
– Do we have to pay for insurance and then be reimbursed or will Obamacare pay for the insurance on a monthly basis?
– How does this affect our taxes filed for 2015?
Answer
If you have access to Medicare then you can't get a Marketplace Tax Credit. Medicare has it's own cost assistance and deductions based on income. At your income amount you don't qualify for Medicare cost assistance, and you won't pay more for Part B premiums.
There is a yearly, not annual $12000 standard deduction limit for Medical expenses.
This applies if you don't itemize your deductions (many older folks don't if they are no longer paying mortgage interest). Anyone who is 65 and older by December 31 of the tax year is entitled to a higher standard deduction. Technically, you are considered 65 on the day before your 65 th birthday so you can take the higher standard deduction if you turn 65 by January 1st.
People age 65 and older (or blind) get an additional standard deduction of $1,200 for married taxpayers and $1,550 for single filers (2014). You can claim the higher deduction if only your spouse is older than 65 and you file a joint return.
To learn more about tax deductions for seniors, see Nolo's Essential Retirement Tax Guide, by John Suttle, CPA and Twila Slesnick, PhD.
See Medicare programs that can help you save on medical costs.
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I am 64 and just reapplied for a plan with a subsidy on my state’s webpage. The plan came back approved without the subsidy. The reason is that I am 4 months out from my 65th birthday. The gap of the 3+ months where I’ll have to pay the full premium without help from a subsidy perplexes me. Yes I qualify to enroll for Medicare but I will not be covered by Medicare until I’m 65. Is this gap in coverage for the subsidies a loophole or what?
I don’t think this is how it works? You can keep your marketplace plan with subsidies until you go on Medicare. What state website are you using? Call them immediately and get a second opinion. You claim your own credits on form 8962 (and the marketplace offers them in advance via the IRS). So unless we are missing something the credits are an individual right based on income and not something you can be denied for because you will have coverage that will exempt you in the future.
I am 50, and as of last year we cannot get a tax credit on the marketplace if we have Medicare Part A. Part B is way too expensive. I canceled it about 20 years ago. I recently, without knowing it would be over $385 dollars a month, submitted the document to start it back up. I thought it would be less than $180 a month as before. It was clearly NOT. I canceled it right away when I saw the first deduction. i was VERY UPSET! This is all because of Obamacare..SOCIALISM! This is NOT right, and Obamacare needs to be fought until it is finally voted OUT PERMANENTLY! I am not going to pay $400 per month for commercial health care insurance either. I am very healthy, and only need to see a doctor maybe twice a year. But when I need it for a certain health issue, like digestive, and need tests, I am screwed, because I cannot afford health insurance!!! And I make too much to get Medicaid! I get survivors benefits under my deceased veteran father, and my diagnosis is bipolar. Even to get medicaid buy in for those who work part time with disabilities, they want me to go through the entire re-evaluation process all over again! I have not seen a psychologist in many years, or taken meds, because all of that either stressed me out worse, or made me very sick!!! i will always have bipolar, so why are they wanting me to go through all that just to get medicaid buy in program, when I receive survivors benefits because of my diagnosis?!?! It is the most ridiculous nonsense, and it is CRIMINAL!!! These radical democrats want to give free this and that, including healthcare to illegals (And they do in Colorado!!!), but citizens are screwed out of any affordable or reasonable health insurance, even if you have a known mental illness, regardless of if you have to see a psychologist/counselor and take meds or not! It makes me so angry!!!!!!!!!!!