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For high-income Americans covered by Medicare, now is the time to make tax moves to minimize an increase in premium surcharges.
Starting in 2018, households with income more than $85,000 (singles) or $170,000 (couples), will be picking up an even greater share of the costs. For example, a single person with an income between $133,500 and $160,000 is expected to pay 30% more in 2018 for their Medicare Part B premium- an increase from $2,856 to $3,720 per year.
Here are some ways to reduce your exposure:

  • Revamp charitable contributions: Consider donating appreciated assets, such as stock instead of cash. This often helps avoid capital-gains tax.
  • Look to a Roth IRA: Payouts from a Roth IRA often aren’t taxable, so they don’t raise your Adjusted Gross Income (AGI).
  • Manage capital gains and losses: Capital gains raise Adjusted Gross Income (AGI), but capital losses can offset gains plus $3,000 of other income in a year.
  • Time the receipt of income: Time the sale of an asset or payment to be split over two years, to keep your Adjusted Gross Income (AGI) lower.
  • Look to work-related savings: Medicare recipients who are still employed can lower than Adjusted Gross Income (AGI) by contributing to 401(k) plans or traditional IRAs.

If you have questions about this, consider contacting your financial planner. Commonwealth Financial Network® (or your firm) does not provide legal or tax advice. You should consult a legal or tax professional regarding your individual situation.
Allen Financial: 31 Chestnut St., Camden, ME 04843   Phone: 207-236-8376.
Fixed Insurance products and services offered through Allen Insurance and Financial, L.S. Robinson Co. or CES Insurance Agency.

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