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For example, younger persons who are still working probably arenât on Medicare and are still paying into the system by a rate of 6.2% of their annual earnings. Elderly persons on Medicare can use the IRS tax deduction to reduce their tax burden by claiming costs associated with Medicare payments.
The deduction is for medical, dental or long-term care insurance premiums that self-employed people pay for themselves, their spouse and their dependents. But until May of last year it was not clear that premiums paid for Medicare coverage were allowable deductions under that section of the tax law.