Higher Medicare Premiums - How to Prepare in 2015

President Obama signed a bill last week that will cause many seniors to pay higher Medicare premiums. The higher premiums will not take effect until 2018, but the increased Medicare surcharges for higher income seniors is based on how much income they report on their 2016 tax return. The new law will create a surcharge on singles with modified adjusted gross income over $133,500 and joint filers with Modified AGI over $267,000. Under the old law the highest surcharge only kicked in for single taxpayers when their Modified AGI went above $214,000 and $428,000 for joint filers.

2015 Tax Planning - Normally it is most beneficial for taxpayers to defer taxes to the following year, but in 2015 higher income seniors may want to think about accelerating income into 2015 and deferring deductions until 2016 to avoid the new lower thresholds on the Medicare surcharges. Taxpayers should also pay close attention to when the best time might be to sell stock with unrealized gains or losses. Creating too much extra income from capital gains could send a taxpayer, who normally would not have income at the levels mentioned above, to be hit with the surcharge in 2016.

If you have any questions about this or any other accounting related topic, please do not hesitate to contact us here at Shein & Wente CPA in Melbourne, Florida!