For those of you filling single at just over $85K in annual income per year and over $170,000 per year if filing jointly, your monthly premium for Medicare Part B bumps up over $4o. Unlike Medicare Part A, which covers hospital costs, and is free to most enrolled, Part B comes at a price. Part B covers other medical costs. These modified adjusted gross income (MAGI) figures include tax-exempt interest as well as your regular adjusted gross income. If you are single and have a MAGI of over $214K or are filing jointly and have a MAGI over $428,000, expect to pay around $335 per month for this Part B coverage.
So how can you reduce these costs for Part B coverage. There are a few key things that can be done:
1) Harvest Losses so that you can offset income in future years. $3K of losses every year can offset regular income, but excess can be carried forward.
2) Re-characterize Traditional IRA to ROTH– This increases current year income, but will lower income in future years as withdrawals from ROTH’s are tax-free in most cases. Also remember that ROTH’s do not have minimum required distributions. If you don’t need the income, you can keep the ROTH intact.
3) Valid Reasons to Lower Premium-Certain situations give you reasons to appeal, including getting married, divorced or widowed. If you or your spouse stop working or cut hours, you might also be able to lower premiums. Contact Social Security for more details.