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Posted by lyelowitz on December 13, 2006, 10:38 pm
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I understand that premiums for Medicare Part B will be
means-tested starting in 2007. For a single person with
income between $80 to $100K, he/she will pay 1.4 times the
standard monthly premium. Between $100K to $150K he/she pays
2 times as much, between $150K and $200K, 2.6 times as much,
and above $200K, 3.2 times. These income limits double for
married filing joint. I also understand that the income test
is based on one's income two years prior to the year the
premium increase kicks in.
Question 1: Is my understanding correct?
Question 2: What counts as income - AGI, taxable income,
other?
Question 3: Other things being approximately equal, is it
feasible to minimize this extra bite for a married couple by
registering the couple's accounts in, say, the wife's SS
number, and letting her take the brunt of the income
(assuming that interest, dividends, and cap gains represent
the bulk), and filing as married-separate? In this way,
only the wife might be subject to the means-testing.
Question 4: What are some strategies for
eliminating/minimizing the impact of means testing? For
example, a person or couple might try to reduce the extra
bite to every other year by bunching up charitable
deductions, state income tax, etc. to every other year,
alternating with the standard deduction, and at least
getting to pay only the standard Medicare premium every
other year.
I appreciate any insights or approaches.
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<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
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<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>
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Posted by Arthur Kamlet on December 15, 2006, 9:59 am
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> I understand that premiums for Medicare Part B will be
> means-tested starting in 2007. For a single person with
> income between $80 to $100K, he/she will pay 1.4 times the
> standard monthly premium. Between $100K to $150K he/she pays
> 2 times as much, between $150K and $200K, 2.6 times as much,
> and above $200K, 3.2 times. These income limits double for
> married filing joint. I also understand that the income test
> is based on one's income two years prior to the year the
> premium increase kicks in.
>
> Question 1: Is my understanding correct?
>
> Question 2: What counts as income - AGI, taxable income,
> other?
>
> Question 3: Other things being approximately equal, is it
> feasible to minimize this extra bite for a married couple by
> registering the couple's accounts in, say, the wife's SS
> number, and letting her take the brunt of the income
> (assuming that interest, dividends, and cap gains represent
> the bulk), and filing as married-separate? In this way,
> only the wife might be subject to the means-testing.
>
> Question 4: What are some strategies for
> eliminating/minimizing the impact of means testing? For
> example, a person or couple might try to reduce the extra
> bite to every other year by bunching up charitable
> deductions, state income tax, etc. to every other year,
> alternating with the standard deduction, and at least
> getting to pay only the standard Medicare premium every
> other year.
>
> I appreciate any insights or approaches.
The mAGI for 2005 is used for 2007, and can be appealed if
very unusual events have changed your circumstances. Death
of a spouse is an example.
mAGI is defined in a Medicare bill, not part of Title 26,
and I don't recall exactly how it is defined.
Being an Ohio preparer, I file many many MFS returns, and as
long as you are not in a community property state, I see
nothing wrong with filing MFS to avoid paying higher
premiums. Who knows? It might actually save you money,
especially if you have large medical or employee or casualty
loss expenses.
If either of you is on Social Security then 85% of that
social secuity will be included in taxable income.
__
Art Kamlet ArtKamlet @ AOL.com Columbus OH K2PZH
<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>
|
|
Posted by Ira Smilovitz on December 15, 2006, 9:59 am
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> I understand that premiums for Medicare Part B will be
> means-tested starting in 2007. For a single person with
> income between $80 to $100K, he/she will pay 1.4 times the
> standard monthly premium. Between $100K to $150K he/she pays
> 2 times as much, between $150K and $200K, 2.6 times as much,
> and above $200K, 3.2 times. These income limits double for
> married filing joint. I also understand that the income test
> is based on one's income two years prior to the year the
> premium increase kicks in.
>
> Question 1: Is my understanding correct?
I haven't checked your multipliers, but conceptually you are correct.
> Question 2: What counts as income - AGI, taxable income,
> other?
Other. It's a form of MAGI which includes certain nontaxable
income, primarily tax-exempt interest.
> Question 3: Other things being approximately equal, is it
> feasible to minimize this extra bite for a married couple by
> registering the couple's accounts in, say, the wife's SS
> number, and letting her take the brunt of the income
> (assuming that interest, dividends, and cap gains represent
> the bulk), and filing as married-separate? In this way,
> only the wife might be subject to the means-testing.
Sure, that might work. However, the difference in Medicare B
premiums is only a few hundred dollars even at high income
levels. I'm reasonably certain that the additional tax bite
from making the changes you suggest and filing MFS will be
much larger. Of course, you should run the numbers yourself.
> Question 4: What are some strategies for
> eliminating/minimizing the impact of means testing? For
> example, a person or couple might try to reduce the extra
> bite to every other year by bunching up charitable
> deductions, state income tax, etc. to every other year,
> alternating with the standard deduction, and at least
> getting to pay only the standard Medicare premium every
> other year.
Since the means test is based on MAGI, nothing you do with
your deductions will have any impact.
Ira Smilovitz
<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>
|
|
Posted by Arthur Kamlet on December 15, 2006, 10:05 am
Please log in for more thread options
> I understand that premiums for Medicare Part B will be
> means-tested starting in 2007. For a single person with
> income between $80 to $100K, he/she will pay 1.4 times the
> standard monthly premium. Between $100K to $150K he/she pays
> 2 times as much, between $150K and $200K, 2.6 times as much,
> and above $200K, 3.2 times. These income limits double for
> married filing joint. I also understand that the income test
> is based on one's income two years prior to the year the
> premium increase kicks in.
>
> Question 1: Is my understanding correct?
>
> Question 2: What counts as income - AGI, taxable income,
> other?
>
> Question 3: Other things being approximately equal, is it
> feasible to minimize this extra bite for a married couple by
> registering the couple's accounts in, say, the wife's SS
> number, and letting her take the brunt of the income
> (assuming that interest, dividends, and cap gains represent
> the bulk), and filing as married-separate? In this way,
> only the wife might be subject to the means-testing.
>
> Question 4: What are some strategies for
> eliminating/minimizing the impact of means testing? For
> example, a person or couple might try to reduce the extra
> bite to every other year by bunching up charitable
> deductions, state income tax, etc. to every other year,
> alternating with the standard deduction, and at least
> getting to pay only the standard Medicare premium every
> other year.
>
> I appreciate any insights or approaches.
The mAGI for 2005 is used for 2007, and can be appealed if
very unusual events have changed your circumstances. Death
of a spouse is an example.
mAGI is defined in a Medicare bill, not part of Title 26,
and I don't recall exactly how it is defined.
Being an Ohio preparer, I file many many MFS returns, and as
long as you are not in a community property state, I see
nothing wrong with filing MFS to avoid paying higher
premiums. Who knows? It might actually save you money,
especially if you have large medical or employee or casualty
loss expenses.
If either of you is on Social Security then 85% of that
social secuity will be included in taxable income.
__
Art Kamlet ArtKamlet @ AOL.com Columbus OH K2PZH
<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>
|
|
Posted by Ira Smilovitz on December 15, 2006, 10:05 am
Please log in for more thread options
> I understand that premiums for Medicare Part B will be
> means-tested starting in 2007. For a single person with
> income between $80 to $100K, he/she will pay 1.4 times the
> standard monthly premium. Between $100K to $150K he/she pays
> 2 times as much, between $150K and $200K, 2.6 times as much,
> and above $200K, 3.2 times. These income limits double for
> married filing joint. I also understand that the income test
> is based on one's income two years prior to the year the
> premium increase kicks in.
>
> Question 1: Is my understanding correct?
I haven't checked your multipliers, but conceptually you are correct.
> Question 2: What counts as income - AGI, taxable income,
> other?
Other. It's a form of MAGI which includes certain nontaxable
income, primarily tax-exempt interest.
> Question 3: Other things being approximately equal, is it
> feasible to minimize this extra bite for a married couple by
> registering the couple's accounts in, say, the wife's SS
> number, and letting her take the brunt of the income
> (assuming that interest, dividends, and cap gains represent
> the bulk), and filing as married-separate? In this way,
> only the wife might be subject to the means-testing.
Sure, that might work. However, the difference in Medicare B
premiums is only a few hundred dollars even at high income
levels. I'm reasonably certain that the additional tax bite
from making the changes you suggest and filing MFS will be
much larger. Of course, you should run the numbers yourself.
> Question 4: What are some strategies for
> eliminating/minimizing the impact of means testing? For
> example, a person or couple might try to reduce the extra
> bite to every other year by bunching up charitable
> deductions, state income tax, etc. to every other year,
> alternating with the standard deduction, and at least
> getting to pay only the standard Medicare premium every
> other year.
Since the means test is based on MAGI, nothing you do with
your deductions will have any impact.
Ira Smilovitz
<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>
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