Uncle Sam uses MAGIC to increase some people’s Medicare premiums by up to $2,600 per year
By Ken Davis
Did you know Medicare Part B premiums are higher for some people than others?
In 2007 a new rule took effect. The Department of Health and Human Services is now required to increase premiums as a beneficiary’s income rises. They look at a person’s MAGIC. That is, they take the person’s adjusted gross income (find this on the last line of page one of IRS form 1040) and add half of their Social Security income, and any municipal bond income they have to it, to arrive at what they call MAGI or modified adjusted gross income.
I add the “C” for confiscation to arrive at MAGIC as they magically increase your taxes by calling it an increase in premium on your Medicare Part B premium.
Medicare Part B premiums table and details.
I discuss a combination annuity strategy in my article, How Line 20(b) Can Help You Sell More Annuities, here on ProducersWEB to reduce MAGIC and thereby reduce taxation on Social Security income. Depending on the client’s situation, that may also work here.
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