lyelowitz[at]yahoo.com wrote:

- quote -

Possible duplicate answer as original reply has not shown:

Q1: No, it is incorrect. See the following link for the
2007 premiums. E.g., a single person with MAGI between $80
to $100K pays $105.80, a 13.2% premium.
http://ssa.gov/pubs/10161.html

Q2: It is MAGI as defined in IRC Sec. 62 disregarding Secs.
135, 911, 931, and 933 and adding back tax exempt interest.
Secs. 135, 911, 931 & 933 refer to any savings bond interest
excluded for higher ed purposes, the foreign earned income
or housing exclusion and any income excluded from sources
within Guam, American Samoa, or the Northern Mariana Islands
& Puerto Rico.

Q3. It is probably not feasible if you continue to live
together. Congress thought of this and the law uses a
different set of factors. See the link I referenced above
for the rates for those who file separate and live together.

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I too asked about strategies about tax planning to minimize
mAGI a few months ago.

- one might take early withdrawals for deferred acounts as
not to be forced to take large one at age 70 and crank up
the mAGI.

- one might consider "Rothing" as much of ones deferral
savings when the ceiling is temprorarily lifted in 2010.
May require a two-step conversion of a 401k to ordinary IRA
then to Roth.

Right now the medicare premium ($122) is about 8% of median
social security check. But with premium inflation of 35%
in the past three years and a means penalty up to 300%, the
premium has a potential to execeed $1000 and half of the SS
check of by the 2020s.

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The brackets are supposed to phase in over several years,
eventually reaching 4x(*) for $200K the next decade
or about $380 a month in 2007 dollars.

(*) In reality mdeicare is supposed to discounting
hospitalization by 75%, but the discount will be removed for
the well-to-do.

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<lyelowitz[at]yahoo.com> wrote:

- quote -

I haven't checked your multipliers, but conceptually you are correct.

- quote -

Other. It's a form of MAGI which includes certain nontaxable
income, primarily tax-exempt interest.

- quote -

Sure, that might work. However, the difference in Medicare B
premiums is only a few hundred dollars even at high income
levels. I'm reasonably certain that the additional tax bite
from making the changes you suggest and filing MFS will be
much larger. Of course, you should run the numbers yourself.

- quote -

Since the means test is based on MAGI, nothing you do with
your deductions will have any impact.

Ira Smilovitz

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

<lyelowitz[at]yahoo.com> wrote:

- quote -

The mAGI for 2005 is used for 2007, and can be appealed if
very unusual events have changed your circumstances. Death
of a spouse is an example.

mAGI is defined in a Medicare bill, not part of Title 26,
and I don't recall exactly how it is defined.

Being an Ohio preparer, I file many many MFS returns, and as
long as you are not in a community property state, I see
nothing wrong with filing MFS to avoid paying higher
premiums. Who knows? It might actually save you money,
especially if you have large medical or employee or casualty
loss expenses.

If either of you is on Social Security then 85% of that
social secuity will be included in taxable income.

__
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

<lyelowitz[at]yahoo.com> wrote:

- quote -

I haven't checked your multipliers, but conceptually you are correct.

- quote -

Other. It's a form of MAGI which includes certain nontaxable
income, primarily tax-exempt interest.

- quote -

Sure, that might work. However, the difference in Medicare B
premiums is only a few hundred dollars even at high income
levels. I'm reasonably certain that the additional tax bite
from making the changes you suggest and filing MFS will be
much larger. Of course, you should run the numbers yourself.

- quote -

Since the means test is based on MAGI, nothing you do with
your deductions will have any impact.

Ira Smilovitz

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

<lyelowitz[at]yahoo.com> wrote:

- quote -

The mAGI for 2005 is used for 2007, and can be appealed if
very unusual events have changed your circumstances. Death
of a spouse is an example.

mAGI is defined in a Medicare bill, not part of Title 26,
and I don't recall exactly how it is defined.

Being an Ohio preparer, I file many many MFS returns, and as
long as you are not in a community property state, I see
nothing wrong with filing MFS to avoid paying higher
premiums. Who knows? It might actually save you money,
especially if you have large medical or employee or casualty
loss expenses.

If either of you is on Social Security then 85% of that
social secuity will be included in taxable income.

__
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

I understand that premiums for Medicare Part B will be
means-tested starting in 2007. For a single person with
income between $80 to $100K, he/she will pay 1.4 times the
standard monthly premium. Between $100K to $150K he/she pays
2 times as much, between $150K and $200K, 2.6 times as much,
and above $200K, 3.2 times. These income limits double for
married filing joint. I also understand that the income test
is based on one's income two years prior to the year the
premium increase kicks in.

Question 1: Is my understanding correct?

Question 2: What counts as income - AGI, taxable income,
other?

Question 3: Other things being approximately equal, is it
feasible to minimize this extra bite for a married couple by
registering the couple's accounts in, say, the wife's SS
number, and letting her take the brunt of the income
(assuming that interest, dividends, and cap gains represent
the bulk), and filing as married-separate? In this way,
only the wife might be subject to the means-testing.

Question 4: What are some strategies for
eliminating/minimizing the impact of means testing? For
example, a person or couple might try to reduce the extra
bite to every other year by bunching up charitable
deductions, state income tax, etc. to every other year,
alternating with the standard deduction, and at least
getting to pay only the standard Medicare premium every
other year.

I appreciate any insights or approaches.

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