- Untaxed social security
- Tax-exempt interest/dividends
3) Go to: https://debbiehoffman.com/medicareplans/ Scroll down for the IRMAA charts. Find your tax filing situation and you’ll easily what your IRMAA can possibly be.
How can you avoid or minimize IRMAA? During the 1 – 3 years before enrolling into Medicare:
- THREE (3) years before you go onto Medicare:
- Sell any property that will incur a capital gains.
- Be finished converting IRA’s to ROTH IRA’s by this year.
- TWO (2) years before you go onto Medicare:
- Contribute as much as possible to your retirement accounts.
- If your earnings are very high and you contribute the maximum to your retirement accounts, check with your financial planner and CPA about selling some assets at a loss during both years before applying for Medicare.
- Consider buying rental property. Normally, you can count on the depreciation and expenses to fix up the property which many times will give you a loss during the first few years. AND the loss appears on the front page of your 1040 which lowers your MAGI!
- Consider starting a business. Many times, you’ll have a loss those first few years with start-up costs and it can offset your earnings.
- Consider holding off starting your Social Security benefits until your income will be lower.
- If you have a lot of tax-exempt interest, consider moving those into a financial vehicle that can ‘defer’ the interest (a deferred annuity).
If there is no way to avoid it, when you can PROVE your income will be lower, file a reconsideration form with Social Security. When the time comes, file your taxes asap and run (don’t walk) to your local Social Security office with your taxes in hand and this form: https://www.ssa.gov/forms/ssa-44.pdf. Social Security will then adjust your Part B and Part D premiums to your normal MAGI.
Is your head about ready to explode? No worries! Just call us and we easily walk you through what to do. Better yet, have your CPA and financial planner call us and we’ll all work on together for you 🙂 Remember to reach out to us at AGE 62 or 3 years from when you will be applying for Medicare so we can really work our magic!
Hoffman Insurance Resources
By calling the number listed on this page, you will be reaching a licensed insurance agent. Debbie Hoffman and Melinda Gann are not connected with the Federal Medicare program.