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Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
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If you're looking for a rollback for a single year event to adjust your MAGI to suit IRMAA, just use the many tax planning tools always available to you, and likely used before.
You can dump 50% of your taxable earnings into your DAF. That might cover your 501c3 contributions for the rest of your life, and beyond. Very handy for appreciated assets.
I also use section 179 (accelerated depreciation) for future business assets, which make my retirement life much easier as a lifelong farmer.
Each of these can dramatically drop your AGI. And there are other methods as well.
I don't want to say ANY one....but does pretty much anyone who bothers to appeal with a life changing event get approved?
Or it depends on who you get as far as the reviewer is concerned. Get put on the wrong person's desk and you're -- DEnied.
Heck, if retirement counts as a life changing event (which it is) then anyone who retires (or sells property and moves, or inherits certain assets) -- wouldn't pay it.
Any numbers on how many people appeal? and approvals vs denials?
I'm not the appeal type...never appeal property taxes for example. But if's as easy as it sounds like it is, I can do that.
Well most appeals are filed due to folks retiring and no longer having the high income of 2 years past. So of course the appeals are approved for such folks. There are 7 "life changing events" listed on the form that are grounds for appeal. Any of those things are valid reasons for removal of your IRMMA assessment. My request was processed and the IRMMA was removed in just a couple of weeks time.
Update: My wife just got approved for SSDI, so in September 2025 she'll be eligible for Medicare. And of course since she's eligible, we have to sign up or else we get hit with the penalty. She'll be 57 at that time, so I guess I just signed up for 8 years of IRMMA surcharges.
Update: My wife just got approved for SSDI, so in September 2025 she'll be eligible for Medicare. And of course since she's eligible, we have to sign up or else we get hit with the penalty. She'll be 57 at that time, so I guess I just signed up for 8 years of IRMMA surcharges.
Oops - make that 4 years of IRMAA surcharges. I’ll retire at 65 and she’ll be 61.
Well most appeals are filed due to folks retiring and no longer having the high income of 2 years past. So of course the appeals are approved for such folks. There are 7 "life changing events" listed on the form that are grounds for appeal. Any of those things are valid reasons for removal of your IRMMA assessment. My request was processed and the IRMMA was removed in just a couple of weeks time.
Thanks.
I wasn't sure whether it was a "you could get it but, they'll-still-resist-and argue-with-you-about-it"....OR....
it's "a routine just-file-this and-you-automatically get-it" kind of thing.
Why is IRMAA such a big deal when selling an asset? In the worst case scenario, if the sale brings your MAGI above $500k, you pay about $4k extra in Medicare premiums for one year (which seems affordable, from a greater than half a million profit you just bagged :-), then it drops back down into what is charged for your usual annual income tier. Obviously it would be better to avoid paying these couple of extra thousand $ to Medicare in one year, but it does not seem overwhelmingly important, ie, in my list of pros and cons for selling an asset (which in my case could be only a condo), the IIRMA would be at the bottom of the list of cons, ie, the least important/ unimportant argument against the property sale.
if someone has a 40k pension they don’t pay more for medicare .
if someone sold their property and now needs that money to generate the exact act same 40k because they have little savings then they are hit hard that year .
Why is IRMAA such a big deal when selling an asset? In the worst case scenario, if the sale brings your MAGI above $500k, you pay about $4k extra in Medicare premiums for one year (which seems affordable, from a greater than half a million profit you just bagged :-), then it drops back down into what is charged for your usual annual income tier. Obviously it would be better to avoid paying these couple of extra thousand $ to Medicare in one year, but it does not seem overwhelmingly important, ie, in my list of pros and cons for selling an asset (which in my case could be only a condo), the IIRMA would be at the bottom of the list of cons, ie, the least important/ unimportant argument against the property sale.
Your comment misses a major point. Everyone who worked paid the same percentage of their wages into Medicare. Everyone who has Medicare pays the same pre-IRMAA premium amount for it. Paying IRMAA is just added on, through a withholding reducing S/S, not unlike an income tax surcharge for older folks who prepared for their retirement.
In your example for 2023, IRMAA for $500K MAGI (single) would be $6,700, plus $900 for Part D (the part D portion can be avoided by not having part D).
My wife and I have paid IRMAA for ten years, and this year we are paying a total of about $7,700 in IRMAA.
So I'm unclear, and it's going to be important in a year or two. We will both be retired for more than 10 years (and over 65) when we sell an investment property. Will the capital gains from that sale cause us to have to pay IRMAA? Can it be appealed since it's a once and done source of income? I guess we'd only have to pay for one year, because our income would go down the next year to our normal retirement amount???
And are those surcharges per person if filing jointly? Could you file separately that year and one person claim all the capital gains and only that person would have to pay the surcharge? Or is that surcharge shown on the link in post 20 for each of us, doubling it to over $9000 for the both of us if we were in the $500K plus bracket with the capital gains?
Last edited by TheShadow; 09-29-2023 at 03:20 PM..
once you are retired there is no appealing it after your first year.
the income is what it is.
the life changing event is retirement and going from working to not working pre being on medicare .
the fact they go back 2 years can hit a year you were just 63 and not on medicare or retired yet .
surcharges are per person. filing separately may have no effect as the gain belongs to both if both names are on the account in some states
how it can be split up is determined by state. but remember the iirma thresholds are different for singes and are about half so you can pump one up way higher in level maybe making things worse
turbo tax
You and your spouse cannot just split your income and deductions up any way you want in order to maximize the MFS tax savings. Instead, state law determines how you must divide up your income and deductions.
If you file a federal tax return separately from your spouse and you live in a community property state, you must report half of all community income and all of your separate income. Generally, the laws of the state in which you are domiciled govern whether you have community property and community income or separate property and separate income for federal tax purposes.
In other states gains on assets that are jointly held can be allocated any way you like, but gains on assets held in one name only must be reported on the owner's tax return.
Last edited by mathjak107; 09-29-2023 at 04:42 PM..
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