R Medicare Premiums Based on 85 or 100% of SS

mickstuder · ‎10-31-2019

Soooooo....this year (2019) because my wife retired our joint income for the first and only time including future years is looking like it may exceed the $170,000 threshold for determining Medicare Drug and Part B Premiums.

So I have a question - it's my understanding a persons Income Tax is calculated on only 85% of your Social Security Income

Is the Income amount that Medicare uses to calculate what your Medicare Drug and Part B Premiums are - based upon 100% of your Social Security Income or like the IRS - only based upon 85% of your Social Security Income?

I know it say it's based on MAGI but I do not know what MAGI is or how to calculate - we will have no Investment Income for 2019 so I don't think that enters into the calculation

I'm just trying to figure out how much of our Social Security Income is going to be included in Medicares Calculations - 100% or 85%

Thanks

Hope Everyone is Well

Regards,

Mick Studer

( " China if You're Listening - Get Trumps Tax Returns " )

" ) " - Anonymous

GailL1 · ‎10-31-2019

Hi, mickstuder - hope you and the wife are having a great time.

To figure MAGI:

*AGI is the total of

Wages, salaries, tips, etc
taxable interest
ordinary dividends
TAXABLE amount of IRAs, Pensions, Annuities
TAXABLE SOCIAL SECURITY BENEFITS
Any additional income from Schedule 1 line 22

To this you will add any NON-taxable interest to come up with your MAGI for IRMAA calculations.

The MAGI used to determine if the income-related monthly adjustment amount (IRMAA) applies is the most recent tax information that IRS is able to provide. Generally, the information is from two years prior to the year for which the premium is being determined, but not more than three years prior.

People have different % of their SS benefit taxable depending upon their income and filing status.

From what you said about your income - 85% will be taxable would be correct.

Unless you and your wife decide to file - Married - filing separately for some reason.

SSA.gov - Benefits Planner | Income Taxes And Your Social Security Benefit

SORRY !!!! -

I have NOT seen the 2020 regular Part B or the IRMAA premiums announced yet for 2020 - I do not know the holdup in this announcement - they usually come out in mid-Oct along with any COLA announcement (1.6% for 2020). Don't think they have even finalized the new Medicare deductible amounts either.

mickstuder · ‎11-01-2019

@GailL1 wrote:
Hi, mickstuder - hope you and the wife are having a great time.

To figure MAGI:
*AGI is the total of
Wages, salaries, tips, etc
taxable interest
ordinary dividends
TAXABLE amount of IRAs, Pensions, Annuities
TAXABLE SOCIAL SECURITY BENEFITS
Any additional income from Schedule 1 line 22
To this you will add any NON-taxable interest to come up with your MAGI for IRMAA calculations.

The MAGI used to determine if the income-related monthly adjustment amount (IRMAA) applies is the most recent tax information that IRS is able to provide. Generally, the information is from two years prior to the year for which the premium is being determined, but not more than three years prior.

People have different % of their SS benefit taxable depending upon their income and filing status.
From what you said about your income - 85% will be taxable would be correct.
Unless you and your wife decide to file - Married - filing separately for some reason.
SSA.gov - Benefits Planner | Income Taxes And Your Social Security Benefit

SORRY !!!! -

I have NOT seen the 2020 regular Part B or the IRMAA premiums announced yet for 2020 - I do not know the holdup in this announcement - they usually come out in mid-Oct along with any COLA announcement (1.6% for 2020). Don't think they have even finalized the new Medicare deductible amounts either.

Thanks Gail - but I'm still left wondering if after I calculate our AGI and MAGI - get the number - do I then get to reduce that final number by the Standard Deduction - we never Itemize - we just take the Standard Deduction

So right now our MAGI is $184,848 - that's significantly above the $170,000 limit but if I get to reduce it by the 2019 $24,400 Standard Deduction we are good - Right? Wrong?

Thanks Again

BTW

( " China if You're Listening - Get Trumps Tax Returns " )

" ) " - Anonymous

GailL1 · ‎11-01-2019

@mickstuder wrote:
BTW

I think that is GREAT, mickstuder - the two of you on a great adventure. You both deserve it.
My gardener also bought his third wheel out of state when he retired (retired from everybody else but me- he is my go to person for most everything now) - I think he went to MI.
Does your's pull out for a lot more room?

Wish my hubby had made it to our retirement - we would have had adventures too.
You both stay safe but have lots of FUN -

GailL1 · ‎11-01-2019

@mickstuder wrote:
Thanks Gail - but I'm still left wondering if after I calculate our AGI and MAGI - get the number - do I then get to reduce that final number by the Standard Deduction - we never Itemize - we just take the Standard Deduction

So right now our MAGI is $184,848 - that's significantly above the $170,000 limit but if I get to reduce it by the 2019 $24,400 Standard Deduction we are good - Right? Wrong?

Thanks Again

Sorry, mickstuder - there is NO adjustment (standard or itemized) to your MAGI for computation of the IRMAA premium.

The tax you will pay on your SS benefit doesn't include it either directly - indirectly it might since any allowable standard or itemized deduction will reduce your overall taxes somewhat.

FYI - any taxes you pay on your SS benefit goes directly back into the SS Trust Fund to help to keep it afloat. That's why these amount have to be shown separately on the tax form so that they can go back to the SS Trust Fund.

Your IRMAA premiums also help to keep Medicare afloat too - it helps to keep down Part B premiums for everybody and it helps our government fund the 75% or so that they pay for beneficiaries to hav Part B and Part D coverage.

I will give you a BIG THANK YOU for both of these payments - taxes paid on your SS benefit and your IRMAA premiums - Part B and Part D.

LOOK they have the 2020 Part D IRMAA extra premiums posted for Part D

mickstuder · ‎11-05-2019

@GailL1 wrote:
@mickstuder wrote:
Thanks Gail - but I'm still left wondering if after I calculate our AGI and MAGI - get the number - do I then get to reduce that final number by the Standard Deduction - we never Itemize - we just take the Standard Deduction

So right now our MAGI is $184,848 - that's significantly above the $170,000 limit but if I get to reduce it by the 2019 $24,400 Standard Deduction we are good - Right? Wrong?

Thanks Again

Sorry, mickstuder - there is NO adjustment (standard or itemized) to your MAGI for computation of the IRMAA premium.

The tax you will pay on your SS benefit doesn't include it either directly - indirectly it might since any allowable standard or itemized deduction will reduce your overall taxes somewhat.

FYI - any taxes you pay on your SS benefit goes directly back into the SS Trust Fund to help to keep it afloat. That's why these amount have to be shown separately on the tax form so that they can go back to the SS Trust Fund.

Your IRMAA premiums also help to keep Medicare afloat too - it helps to keep down Part B premiums for everybody and it helps our government fund the 75% or so that they pay for beneficiaries to hav Part B and Part D coverage.

I will give you a BIG THANK YOU for both of these payments - taxes paid on your SS benefit and your IRMAA premiums - Part B and Part D.
LOOK they have the 2020 Part D IRMAA extra premiums posted for Part D

Don't thank me yet

SSA Form 44 - Medicare Income Related Monthly Adjustment Amount - "Life Changing Event" - seems to be applicable in our situation

Our Income is only going to exceed the cap for one year - this year - because my wife had to cash in accrued paid time off over a 25 year career - retirement bonuses - 401k loan payoffs etc.

After this year we will once again be poor - so don't make any plans for our increased monthly payments yet!

;}

( " China if You're Listening - Get Trumps Tax Returns " )

" ) " - Anonymous

GailL1 · ‎11-06-2019

@mickstuder wrote:

Don't thank me yet

SSA Form 44 - Medicare Income Related Monthly Adjustment Amount - "Life Changing Event" - seems to be applicable in our situation

Our Income is only going to exceed the cap for one year - this year - because my wife had to cash in accrued paid time off over a 25 year career - retirement bonuses - 401k loan payoffs etc.

After this year we will once again be poor - so don't make any plans for our increased monthly payments yet!

;}

I wish you had said that in the beginning - I thought you were now rich.

Yes, you should be able to get an adjustment for this type of single year income.

Remember SSA will not know about your 2019 taxes until about 2021 - they should send you a notice at that time and that is when you file SSA Form 44.

Your notice of this matter maybe posted sooner on your mySocialSecurity.gov account than receiving it by mail.

There is a new 2019 Form but make sure when you file it in about 2021 that you use the most current Form 44 available at the time.

Just compute your taxes for 2019 as per the instructions - You will have to pay tax on your SS benefits because this money your wife received when she retired will be considered income for the MAGI - I believe it will be shown on her W-2.

Happy Travels.

mickstuder · ‎10-31-2019

@mickstuder wrote:
Soooooo....this year (2019) because my wife retired our joint income for the first and only time including future years is looking like it may exceed the $170,000 threshold for determining Medicare Drug and Part B Premiums.

So I have a question - it's my understanding a persons Income Tax is calculated on only 85% of your Social Security Income

Is the Income amount that Medicare uses to calculate what your Medicare Drug and Part B Premiums are - based upon 100% of your Social Security Income or like the IRS - only based upon 85% of your Social Security Income?

I know it say it's based on MAGI but I do not know what MAGI is or how to calculate - we will have no Investment Income for 2019 so I don't think that enters into the calculation

I'm just trying to figure out how much of our Social Security Income is going to be included in Medicares Calculations - 100% or 85%

Thanks

Hope Everyone is Well

Regards,

Mick Studer