What are Medicare Part B income limits?

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tadamsmar
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What are Medicare Part B income limits?

Post by tadamsmar » Mon Dec 02, 2019 1:09 pm

This site:

https://www.cnbc.com/2019/11/11/heres-h ... -2020.html

indicates that the income limit for the standard premium in 2020 will be $174,000 for married filing jointly.

It is applied to your 2018 MAGI.

But I limited my Roth conversions in 2018 to keep my MAGI below $170,000 because I thought that was the limit.

So now I figure I need to know the income limit for 2021 in order to optimize my Roth conversion this year.

Should I use the 2021 income limit for my 2019 tax filing strategy?

What is the 2021 income limit?

retiredjg
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Re: What are Medicare Part B income limits?

Post by retiredjg » Mon Dec 02, 2019 2:57 pm

I'm sure you looked before asking this question. I just spent some time looking as well. I could not find the number.

They do tell you what the base Medicare premium is expected to be in 2021, but I could find nothing about where the IRMAA lines will be.

I too limited Roth conversions in 2018 to under $85k (single), but apparently the limit was really $87k/$174k but we just didn't know it yet. I was about to do the same this year, but I think I'll go up to $87k since that was the number that should have been used last year.

It's confusing. And the way some charts are presented makes the confusion worse.

retiredjg
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Re: What are Medicare Part B income limits?

Post by retiredjg » Mon Dec 02, 2019 3:18 pm

I gather that the number will not be known until it is known what inflation was this year. If this is correct, you can never optimize - the only thing to do is use last year's number?

I wish someone would explain this to me.

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FIREchief
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Re: What are Medicare Part B income limits?

Post by FIREchief » Mon Dec 02, 2019 6:40 pm

retiredjg wrote:
Mon Dec 02, 2019 3:18 pm
I gather that the number will not be known until it is known what inflation was this year. If this is correct, you can never optimize - the only thing to do is use last year's number?

I wish someone would explain this to me.
I believe that you are correct. The 2020 IRMAA thresholds are now posted on the Medicare website, so using them works for 2021 as long as there isn't any deflation. I'm guessing that most of us would allow a small buffer when determining 2019 Roth conversion targets.
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

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Wiggums
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Re: What are Medicare Part B income limits?

Post by Wiggums » Mon Dec 02, 2019 6:48 pm

tadamsmar wrote:
Mon Dec 02, 2019 1:09 pm
This site:

https://www.cnbc.com/2019/11/11/heres-h ... -2020.html

indicates that the income limit for the standard premium in 2020 will be $174,000 for married filing jointly.

It is applied to your 2018 MAGI.

But I limited my Roth conversions in 2018 to keep my MAGI below $170,000 because I thought that was the limit.

So now I figure I need to know the income limit for 2021 in order to optimize my Roth conversion this year.

Should I use the 2021 income limit for my 2019 tax filing strategy?

What is the 2021 income limit?
It looks like they changed the way that number is derived.

https://www.investmentnews.com/article/ ... on-in-2020

diy60
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Re: What are Medicare Part B income limits?

Post by diy60 » Mon Dec 02, 2019 6:55 pm

retiredjg wrote:
Mon Dec 02, 2019 3:18 pm
I wish someone would explain this to me.
This post from a few months ago helped further my understanding.
viewtopic.php?t=290754#p4755677

diy60
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Joined: Wed Sep 07, 2016 6:54 pm

Re: What are Medicare Part B income limits?

Post by diy60 » Mon Dec 02, 2019 6:58 pm

Wiggums wrote:
Mon Dec 02, 2019 6:48 pm
It looks like they changed the way that number is derived.

https://www.investmentnews.com/article/ ... on-in-2020
I recall it was pointed out in some other thread the linked article has incorrect values.

retiredjg
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Re: What are Medicare Part B income limits?

Post by retiredjg » Mon Dec 02, 2019 7:01 pm

diy60 wrote:
Mon Dec 02, 2019 6:58 pm
Wiggums wrote:
Mon Dec 02, 2019 6:48 pm
It looks like they changed the way that number is derived.

https://www.investmentnews.com/article/ ... on-in-2020
I recall it was pointed out in some other thread the linked article has incorrect values.
I'm guessing you are referring to the $86k/$172k numbers? I stumbled on that as well. All the other sources say $87/$174.....it left me baffled.

diy60
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Re: What are Medicare Part B income limits?

Post by diy60 » Mon Dec 02, 2019 7:16 pm

retiredjg wrote:
Mon Dec 02, 2019 7:01 pm
diy60 wrote:
Mon Dec 02, 2019 6:58 pm
Wiggums wrote:
Mon Dec 02, 2019 6:48 pm
It looks like they changed the way that number is derived.

https://www.investmentnews.com/article/ ... on-in-2020
I recall it was pointed out in some other thread the linked article has incorrect values.
I'm guessing you are referring to the $86k/$172k numbers? I stumbled on that as well. All the other sources say $87/$174.....it left me baffled.
Yes, this is the Medicare gov site that has the values, part way down the page for 2020.
https://www.medicare.gov/your-medicare- ... rt-b-costs

I don't think tier 5 is schedule to be indexed to inflation until year 2029. The rest of the numbers appear to be indexed to inflation. At least that is my amateur understanding.

jhawktx
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Re: What are Medicare Part B income limits?

Post by jhawktx » Mon Dec 02, 2019 7:27 pm

The 2021 number will not be available until November 2020.

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tadamsmar
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Re: What are Medicare Part B income limits?

Post by tadamsmar » Mon Dec 02, 2019 8:48 pm

diy60 wrote:
Mon Dec 02, 2019 7:16 pm
retiredjg wrote:
Mon Dec 02, 2019 7:01 pm
diy60 wrote:
Mon Dec 02, 2019 6:58 pm
Wiggums wrote:
Mon Dec 02, 2019 6:48 pm
It looks like they changed the way that number is derived.

https://www.investmentnews.com/article/ ... on-in-2020
I recall it was pointed out in some other thread the linked article has incorrect values.
I'm guessing you are referring to the $86k/$172k numbers? I stumbled on that as well. All the other sources say $87/$174.....it left me baffled.
Yes, this is the Medicare gov site that has the values, part way down the page for 2020.
https://www.medicare.gov/your-medicare- ... rt-b-costs

I don't think tier 5 is schedule to be indexed to inflation until year 2029. The rest of the numbers appear to be indexed to inflation. At least that is my amateur understanding.
Thanks to all.

I think the Medicare site should be accurate.

$174,000 is the 2020 limit that is applied to the 2018 MAGI.

So, I guess I will use that as the limit applied to this year (2019). I need the number before Tax day in 2020 since I have a way to adjust using a Trad IRA vs Roth IRA for consulting income, others may need it before the end of 2019.

I guess one could speculate that it will be larger than $174,000, but I think I will pass on that.

It would be nice to know if there is a rule that it will not be decreased due to deflation. But deflation is unlikely, I think.

retiredjg
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Re: What are Medicare Part B income limits?

Post by retiredjg » Tue Dec 03, 2019 7:41 am

This is just an annoying system in my opinion. :annoyed

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