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12-09-2021, 07:56 AM
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#1
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Recycles dryer sheets
Join Date: Jan 2007
Posts: 211
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IRMAA Clarification
I'm confused by the language describing the IRMAA cut-offs. I understand that if my wife and I go over the $176K cut-off in 2021, that we will pay a surcharge on our 2023 medicare premium. But is the comparison made to my 2021 income or my 2019 income? i.e. if my income in 2021 exceeds 176K, do I have to pay a surcharge? I am currently projected to make $174K this year but I have an opportunity to receive an additional $3K in income this year. I have to decide whether or not to defer that income.
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12-09-2021, 08:10 AM
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#2
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Aug 2013
Location: Texas
Posts: 10,932
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The amount you make this year 2021 (MAGI) will determine your IRMAA penalty for 2023.
So basically, you make the money this year (2021), then file your 2021 tax return in early 2022 and they'll use that to determine if you pay an IRMAA penalty in 2023 on your Medicare premiums...
Clear as mud? 
__________________
20's "something" mind, trapped in a 70's "something" body
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12-09-2021, 08:17 AM
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#3
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Thinks s/he gets paid by the post
Join Date: Jun 2010
Posts: 2,139
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Also, it's not calculated on your total income. The income used to determine IRMAA is a form of Modified Adjusted Gross Income (MAGI), but it’s specific to Medicare. The Modified Adjusted Gross Income is different from your Adjusted Gross Income, because some people have additional income sources that have to be added to their AGI in order to determine their IRMAA-specific MAGI.
__________________
And whatever your labors and aspirations in the noisy confusion of life, keep peace in your soul. With all its sham, drudgery, and broken dreams, it is still a beautiful world. Be cheerful. Strive to be happy.- Desiderata by Max Ehrmann
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12-09-2021, 08:17 AM
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#4
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Recycles dryer sheets
Join Date: Jan 2007
Posts: 211
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But are they comparing my 2021 income of 174K (or maybe 177K) to the $182K cut-off (or some future amount determined next year) or the $176K cut-off set in 2021?
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12-09-2021, 08:31 AM
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#5
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Recycles dryer sheets
Join Date: Nov 2014
Posts: 198
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2018 MAGI of $174,000 was cut-off for MFJ lowest 2020 Medicare Premiums
2019 MAGI of $176,000 was cut-off for 2021 Medicare Premiums
2020 MAGI of $182,000 was cut-off for 2022 Medicare Premiums
2021 MAGI limit for 2023 Medicare Premiums has not yet been determined.
__________________
ER'd 6/5/2015 at age 58. DW retired 6/18/2021 with small pension and SS. Planned WR before my SS (2024-2026) is 4-5%, then we will start my SS and a lower WR at age 70 (2027)
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12-09-2021, 08:37 AM
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#6
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Recycles dryer sheets
Join Date: Jan 2007
Posts: 211
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Thank you! That's what I thought it was but I had to make double sure before accepting additional income of only $3,000. The surcharge when added to the taxes would make my net take-home on that little windfall close to zero.
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12-10-2021, 12:26 PM
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#8
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Jul 2008
Location: Leeward Oahu
Posts: 17,915
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Fortunately (or unfortunately, depending on your view-point) I only broke through the IRMAA limits "accidentally" because of depreciation recapture on the sale of a rental. It's complicated and not always fully knowable ahead of time. Fortunately, it was only a one-year issue for me. YMMV
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Ko'olau's Law -
Anything which can be used can be misused. Anything which can be misused will be.
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