How Is The Medicare Deduction Figured?

[zeros]

I'm thinking it is figured on a prior adjusted gross income figure but not sure about that?

[zeros]

The Amount They Take Out of the Social Security Check.

I thought I heard it was based on adjusted gross income for prior year.

[dtlee]

That's IRMAA that FEDuke keeps talking about. Like most things, it is based on a Modified AGI, but AGI is usually a good estimate.

Take a look here and other places around that site.

https://q1medicare.com/q1group/MedicareAdvantagePartD/Blog.php?blog_id=578

It can be a good reason to file separately when one spouse is covered and the other is still slaving away.

There is an appeals process, but it is quite specific.

[dtlee]

Had a client with a disabled wife who was downsized near the end of the year with 13 weeks of severance. As the main wage earner, it would have really hurt to file them separately, but filing jointly with 25% more income introduced them to IRMAA. Imagine losing the majority of the household income and then getting hit with a huge increase in the cost of medicare. There is a process for appealing the change when the prior year MAGI is not a good indicator of actual income in circumstances where a job loss occurred, but there is no guarantee that this will be successful.

[dtlee]

Doesn't filing MFS really mess up the taxable amount of Soc Sec benefits (especially if they're <85% taxable) ??

I'm assuming your couple does NOT maintain separate households. If so, their excludable base amounts for the Form 1040 taxable benefits calculations are. . .zero.

As for the IRMAA exclusion, it's a pretty tough hill to climb to get an exception. There's more to it than "a good indicator." I believe the IRS insists on something related to a "life-changing event" (as defined by them). Link to SSA-44 -->>> https://www.ssa.gov/forms/ssa-44.pdf (It does appear your clients may have a better chance at a waiver than most IRMAA victims.)

FE

Agreed, but the disabled spouse only had the social security and a part time job, not enough to even approach impacting IRMAA. Jointly, the Social Security was 85% taxable, but separately, I think it was less than 80%. They were granted the waiver due to his loss of the job after providing documentation of the remaining income they were now receiving.