My husband and I are nearing retirement. We have been looking at our finances and realize that our modified adjusted gross income (MAGI) will have an impact on what our Medicare Part B premium will be. Please help me make sense of how this is calculated!
Thank you for asking! We get this question often.
Let’s start by saying that often, your modified adjusted gross income (MAGI) is the same as your adjusted gross income (AGI). Your AGI is simply the total of all your income minus any deductions. This is a line item on your 1040 tax return. To calculate your MAGI for Medicare Part B premium determination, you add back in any tax-exempt interest income.
Now that you calculated your MAGI, this will be used to determine if you will receive an “Income Related Monthly Adjusted Amount” (IRMAA) which will affect your monthly Medicare Part B premium and also your Medicare Part D premium. The IRMMA will be determined by your MAGI from 2 years ago. For example, going on Medicare in 2021, your premium will be determined using your 2019 MAGI.
In 2021, if you have a MAGI less than $88,000 in 2019 filing single or $176,000 if filing jointly you will pay $148.50 for Medicare Part B. You can go to www.medicare.gov to see what you will be charged if your income is higher than this amount. Your prescription premium depends on the plan you choose. Make sure to visit us at www.bondimedicaresolutions.com or call 215-256-5954. ASK US, WE CAN HELP!
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