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Medicare Cost Hikes--and Your Taxes

Rena Crispin, CUDE, CCUFC / February 1st, 2016

The Medicare and CHIP Reauthorization Act that became law in April 2015, commonly referred to as the Doc Fix, will cause an increase in Medicare Part B and Part D premium surcharges for individuals with higher incomes.

Starting in 2018, singles with 2016 modified adjusted gross income (MAGI) between $133,501 and $214,000, and married couples filing jointly with 2016 MAGI between $261,001 and $428,000 will have increased surcharges.

The average individual who receives these increased surcharges will pay $1,000 more annually than they had previously. For married couples, it will be $2,000 a year.

Additionally, Medicare Part B premiums will increase for people whose incomes are not high enough to be affected by the premium surcharges. The Part B monthly premium is expected to increase from $104.90 in 2015 to $181 by 2025.

You can include Medicare premiums and other qualifying expenses in order to claim the itemized deduction for medical expenses on your Form 1040. Remember—you can only claim the itemized deduction to the extent your total qualifying expenses exceed either 7.5% of adjusted gross incomed (AGI) or 10% of AGI.

Source: MarketWatch


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