Medicare Premiums

Technical topics regarding tax preparation.
#1
ccscpa  
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Retired taxpayer disposed of a rental property in 2016 for a large capital gain. As expected, the taxpayer’s Medicare premiums were increased. The taxpayer’s 2017 tax return showed more normal taxable income. The taxpayer would like to know when they can expect their Medicare premiums to be lowered back to normal levels. Is that 1/1/19?
 

#2
Joan TB  
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See page 3 of this brochure:
https://www.ssa.gov/pubs/EN-05-10536.pdf

Looks like they generally use the 2017 tax return (filed in 2018) to calculate the extra for 2019, if any.
 

#3
ccscpa  
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Thanks. I did run across that publication while performing some initial research. The taxpayer is looking to determine what month they can anticipate being notified that their premiums will be lowered. I figured that correspondence would be sent out to beneficiaries at the same time each year.
 

#4
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ccscpa wrote:Thanks. I did run across that publication while performing some initial research. The taxpayer is looking to determine what month they can anticipate being notified that their premiums will be lowered. I figured that correspondence would be sent out to beneficiaries at the same time each year.


I believe the Social Security statements telling folks their amounts for the new year come out in early Dec. They should have the deduction amount for medicare on it and it should be the lower amount. I don't believe medicare sends out something separately.
 

#5
WEISSEA  
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Taxpayer should appeal increase at local Medicare office claiming gain a onetime event. Medicare agent not required to lower premium but sometimes they do.
 

#6
lucyko  
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The event described in this post ,even thou it may be a one time event , will not qualify for the exception . Social Security is very stringent about the exceptions. See post #2 fir list of qualified exceptions .
 

#7
Jake  
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Question - one year above the threshold should result in only one year of premium, right?
 

#8
lucyko  
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Yes; recalculated annually
 

#9
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Yes, but if the taxpayer's premium increase each year was restricted to the increase in SS payments, I believe the Hold Harmless provisions no longer apply and the taxpayer's premium will return to what it would have been, had the increase not been restricted.
 


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