Medicare MAGI Question

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Topic Author
Arby
Posts: 327
Joined: Fri Jun 19, 2009 2:17 am

Medicare MAGI Question

Post by Arby » Tue Dec 03, 2019 12:54 am

I am a bit confused re Medicare MAGI and want to get it right because it appears that going over limits by even a penny has severe consequences.

My understanding is that the starting point for calculating Medicare MAGI is one's AGI on his tax return two years prior.

I know that some Social Security income may taxable but I am unclear as to whether or not any Social Security income is included in one's AGI.

Does Social Security income affect Medicare MAGI in any way?

Thanks! :D

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FiveK
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Re: Medicare MAGI Question

Post by FiveK » Tue Dec 03, 2019 2:41 am

Arby wrote:
Tue Dec 03, 2019 12:54 am
Does Social Security income affect Medicare MAGI in any way?
Yes, to the extent the SS income affects one's AGI. In other words, by the amount of SS that is taxable.

See MAGI for Medicare premiums (IRMAA tiers) for more details.

Topic Author
Arby
Posts: 327
Joined: Fri Jun 19, 2009 2:17 am

Re: Medicare MAGI Question

Post by Arby » Tue Dec 03, 2019 3:51 am

FiveK wrote:
Tue Dec 03, 2019 2:41 am
Arby wrote:
Tue Dec 03, 2019 12:54 am
Does Social Security income affect Medicare MAGI in any way?
Yes, to the extent the SS income affects one's AGI. In other words, by the amount of SS that is taxable.

See MAGI for Medicare premiums (IRMAA tiers) for more details.
Thanks for the link FiveK but it is still unclear to me. I reckon my question then becomes to what extent does SS income affect my AGI? To me this is a distinct from the amount of SS that is taxable. Maybe I'm just being obtuse.

For example, [url]https://finance.zacks.com/social-securi ... 0.html/url] states:
Combined Income for Individuals
To calculate your combined income, add together your adjusted gross income, the value of nontaxable interest income, plus half of your total Social Security benefits for the year.
]

To me, this implies that half of my SS income is included in my Combined Income which will certainly affect my taxes but none of my SS Income would be part of my AGI.

But I strongly suspect that I'm missing something..

Or from the AARP website:
For purposes of determining how the Internal Revenue Service treats your Social Security payments, “income” means your adjusted gross income plus nontaxable interest income plus half of your Social Security benefits. /quote]

Seasonal
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Re: Medicare MAGI Question

Post by Seasonal » Tue Dec 03, 2019 5:34 am

The taxable portion of SS is included in AGI. See https://www.irs.gov/pub/irs-pdf/f1040.pdf

You can parse through:
For purposes of this subsection, the term “modified adjusted gross income” means adjusted gross income (as defined in section 62 of the Internal Revenue Code of 1986)—

(i) determined without regard to sections 135, 911, 931, and 933 of such Code; and

(ii) increased by the amount of interest received or accrued during the taxable year which is exempt from tax under such Code. In the case of an individual filing a joint return, any reference in this subsection to the modified adjusted gross income of such individual shall be to such return’s modified adjusted gross income.
https://www.ssa.gov/OP_Home/ssact/title18/1839.htm

Since the taxable portion of SS is already included in AGI, you don't also add 50% of SS.

retiredjg
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Re: Medicare MAGI Question

Post by retiredjg » Tue Dec 03, 2019 8:52 am

Take a look at your 2018 tax return. Find line 7 and notice that line 7 is your AGI.

Then see what is on lines 1 - 6. These are the things that add up to give your AGI. The taxable portion of your SS is part of that.

Topic Author
Arby
Posts: 327
Joined: Fri Jun 19, 2009 2:17 am

Re: Medicare MAGI Question

Post by Arby » Tue Dec 03, 2019 9:22 am

OK thanks guys!

So then to be in lowest Medicare premium tier, other Income such as pension income, TIRA withdrawals, etc. plus 85% of Social Security income would have to be less than 85K. right?

retiredjg
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Re: Medicare MAGI Question

Post by retiredjg » Tue Dec 03, 2019 10:07 am

Yes, but the number apparently has gone up to $87k and may go up further (which will be unknown for many months). I do not know if it can go down.


MAGI for IRMAA is AGI plus tax-exempt interest plus a few other things that don't get mentioned often. I always leave a buffer of at least $1k myself, just in case.

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