The important "trigger" income levels for 2022

[steelyman]

Quote:

Originally Posted by jollystomper Gumby, thanks very much! As Earth, Wind & Fire would say, "You're a Shining Star..."

I always liked this one and have a DVD of the broadcast (circa 1999).

https://youtu.be/UQyvSWownWw

[freddyw]

Thanks for taking the time to put this together. No small task.

[youbet]

Thanks Gumby! Great work!

Not that it would impact many of us, but isn't there a tier 5 IRRMA level that begins at $750k (for couples)?

https://www.medicareresources.org/me...-amount-irmaa/

Table 1. Part B – 2022 IRMAA
Individual Joint Monthly Premium
$91,000 or less $182,000 or less $170.10
> $91,000 – $114,000 > $182,000 – $228,000 $238.10
> $114,000 – $142,000 > $228,000 -$284,000 $340.20
> $142,000 – $170,000 > $284,000 – $340,000 $442.30
> $170,000 – $500,000 > $340,000 – $750,000 $544.30
Greater than $500,000 Greater than $750,000 $578.30

[Palmtree]

Forgive me for asking but I've not been following this too well.
Could someone please tell this clueless person, what is a "trigger income" and what does it trigger?

[SecondCor521]

Quote:

Originally Posted by Palmtree Forgive me for asking but I've not been following this too well. Could someone please tell this clueless person, what is a "trigger income" and what does it trigger?

It's just the various income levels where important tax things happen. For people who are able to manage their taxable income and AGI, it's good to be aware of them so one can manage their income to either acquire the good thing (such as a tax credit), or avoid a bad thing (such as a higher tax bracket).

[Gumby]

Quote:

Originally Posted by youbet Thanks Gumby! Great work! Not that it would impact many of us, but isn't there a tier 5 IRRMA level that begins at $750k (for couples)? https://www.medicareresources.org/me...-amount-irmaa/ Table 1. Part B – 2022 IRMAA Individual Joint Monthly Premium $91,000 or less $182,000 or less $170.10 > $91,000 – $114,000 > $182,000 – $228,000 $238.10 > $114,000 – $142,000 > $228,000 -$284,000 $340.20 > $142,000 – $170,000 > $284,000 – $340,000 $442.30 > $170,000 – $500,000 > $340,000 – $750,000 $544.30 Greater than $500,000 Greater than $750,000 $578.30

Yes, there is. But I figure if you're making that much money you can just ask your accountant (or the family office).

[Gumby]

Quote:

Originally Posted by SecondCor521 It's just the various income levels where important tax things happen. For people who are able to manage their taxable income and AGI, it's good to be aware of them so one can manage their income to either acquire the good thing (such as a tax credit), or avoid a bad thing (such as a higher tax bracket).

I could not have explained it better.

[Dash man]

Quote:

Originally Posted by Gumby Yes, there is. But I figure if you're making that much money you can just ask your accountant (or the family office).

No accountant or family office, just a letter from Social Security telling us. We were expecting it after large Roth conversions and restricted stock DW had that vested last year.

[youbet]

Quote:

Originally Posted by Gumby Yes, there is. But I figure if you're making that much money you can just ask your accountant (or the family office).

Well, that level of MAGI is not on my radar. (There's the understatement of the day! ) And I'm my own non-qualified accountant. But I just wanted to be sure I was imagining what would happen if I won the Mega-Lottery someday!

Thanks.

[marko]

I just got my letter today from SS informing me that my 5.9% 'raise' NETS me $36 LESS than this year due to the IRRMA adjustment.

[FANOFJESUS]

Thanks Gumby for putting this up every year.

[Dreamer]

Thanks Gumby. Appreciate you doing this.

[madsquopper]

Just to be clear, aren't the IRMAA levels based on your TY2020 income? I'm currently figuring out what the level 2 limit is going to be for TY2021 (which would affect the IRMAA in 2023) and have seen a few estimates of around 238,000. But the actual number won't be released until next August. I may just use the 2020 number of 228,000 to be ultra-safe as trying to cut it very close doesn't have a huge impact for me.

Just want to make sure I'm understanding this correctly and that 228,000 should be my target for this current year

[SecondCor521]

Quote:

Originally Posted by madsquopper Just to be clear, aren't the IRMAA levels based on your TY2020 income? I'm currently figuring out what the level 2 limit is going to be for TY2021 (which would affect the IRMAA in 2023) and have seen a few estimates of around 238,000. But the actual number won't be released until next August. I may just use the 2020 number of 228,000 to be ultra-safe as trying to cut it very close doesn't have a huge impact for me. Just want to make sure I'm understanding this correctly and that 228,000 should be my target for this current year

Yes. From OP:

Quote:

$182,001 - IRMAA Medicare surcharge begins (based on income two years prior. i.e. 2020 income)

$182K is the 2022 level based on 2020 MFJ MAGI for tier 1. $228K is the 2022 level based on 2020 MFJ MAGI for tier 2.

I agree with you that $228K is probably a safe number to use for a 2021 income target, which would affect 2023 IRMAA and would probably keep you and your spouse safely in tier 1.

[jim584672]

The new 2022 Federal Poverty Level just came out. ACA plans for 2023 will be based on this number.

2022 POVERTY GUIDELINES FOR THE 48 CONTIGUOUS STATES AND THE DISTRICT OF COLUMBIA Persons in family/household Poverty guideline
1 $13,590 from $12,880 in 2021
2 $18,310
3 $23,030
4 $27,750
5 $32,470
6 $37,190
7 $41,910
8 $46,630
For families/households with more than 8 persons, add $4,720 for each additional person.
source: https://aspe.hhs.gov/topics/poverty-...rty-guidelines
https://www.govinfo.gov/content/pkg/...2022-01166.pdf

[pacergal]

Thank you, Gumby

[lawman]

Thanks!

[ERhoosier]

Thanks to Gumby for collecting this info in one place!
And pardon me if I missed this being covered before regarding Medicare IRMAA determinations.


IRMAA is indeed based on Fed tax return from 2 yrs prior (e.g. 2020 for 2022 IRMAA calculation). However if you have had a "life changing event" which significantly lowered your income since that 2yr prior tax return (like retirement with loss of those job earnings), there is a form (SSA-44) where you can request adjustment of your IRMAA to reflect that.

https://www.ssa.gov/forms/ssa-44-ext.pdf


Also- There are multiple different MAGIs used for various Fed tax or benefit purposes. MAGI for IRMAA assessments include add back of any tax-exempt interest (see SSA-44 Instructions). Since IRMAA Tiers are 'cliffs' (i.e. just $1 too much MAGI can bump up IRMAA Tier), for some even a few $$ one way or the other can be important.

[rkser]

Great Job Gumby, Thankyou Sir

[kgtest]

Gumby, is anyone collecting important Trigger income levels for 2023? I think if we combined this information with "other" important income levels it could be even more helpful like contribution limits...

For instance...

The Social Security OSADI Contribution and Benefit base for 2023 is being raised from ($147,000 in 2022) to $160,200 in 2023.
See: https://www.ssa.gov/oact/cola/cbbdet.html This is essentially 2023 social security earnings limits cutoff. SO after $160,200 any additional earnings will not be counted towards the social security credit system. This is helpful for folks who are self employed and also define there own "reasonable" salaries for the year. It might not make sense to pay yourself more than $160,200 in 2023 since that is the cutoff for SS contribution benefits.


IRA Contribution Limits: $6,500 ($7,500 if you're age 50 or older)

401(k), 403(b), most 457 plans, and TSP Contribution Limits: $22,500 ($30,000 if you're age 50 or older)


Tax Deductibility of IRA Contributions (Tax Year 2023)
2023-Tax-Deductibility-of IRA-Contributions.jpg

Roth IRA Contribution Limits (Tax Year 2023)
2023_Roth-Ira-Contriubtion-Limits.jpg


Some OTHER important solo entrepreneur contribution limits for 2023:

Solo 401k Employee Contribution Limit: $22,500
Solo 401k Employer nonelective contributions: *Up to 25% of compensation not to exceed $66,000 ($73,500 if you're age 50 or older)

SEP Contribution Limits (including grandfathered SARSEPs: *Up to 25% of compensation not to exceed $66,000 ($69,500 if you're age 50 or older)

*An Owner of a business can essentially claim a salary of up to $263,950.00 to retain the maximum contribution limit for Solo/SEP nonelective contributions of $66,000 - $22,500 for a total of $43,500 (employer) contributions.

As an example for me under age 50, I can put in $6,500 into Solo Roth 401k, $16,000 into my Solo 401k, and $43,500 as an Employer into the nonelective contributions. To sweeten then deal, I can also put in $6,500 into my Individual Roth IRA.