ROTH Conversion/Medicare Part B Monthly Cost
Beware Medicare Part B monthly cost adjustment if exceeding the MAGI range with ROTH Conversion. I didn’t take this factor into account when determining how much to convert in 2008 and consequently our “married filing jointly return” MAGI exceeded the threshold of the appropriate MAGI range by $69.00 which will cost both me and my spouse an additional $44.20 per month each ( or $1,060.00 annually ) for our Medicare Part B premium in 2010. Additionally, I failed to factor into MAGI amount the small amount of tax exempt interest that was part of the total computation.
Question: Is there any way to undo this situation and save the approximately $ 1,000 per year for 2010 since the October 2009 deadline for 2008 ROTH Recharacterizations has passed?
Permalink Submitted by Alan Spross on Mon, 2009-11-30 22:57
You cannot partially recharacterize the conversion now, since the deadline for that was 10/15/2009. Two possibilities exist here:
1) Recheck your return to see if there is any other amendment you can file that reduces your AGI. You can still amend the return and then appeal the surcharge if there is any justification to amend.
2) Check the following link to see if you might qualify for exemption due to reduction of income in 2009 or 2010 unrelated to the conversion:
http://www.socialsecurity.gov/pubs/10161.html
If you cannot justify revision, at least consider that the conversion might save you from this surcharge in some later year when your RMDs would have become high enough to trigger the surcharge.
Permalink Submitted by mk foss on Tue, 2009-12-01 00:38
One of my clients filed a Request for Reconsideration of increased Medicare payments. She had sold her residence at a gain then invested the net proceeds in a senior living facility for her lifetime. She filed the request as soon as she got the notice and she received a reply in February after they had taken the increased premiums from her Social Security for a full year. The reply said that if her income was really only high for one year, payments would decrease the next year.
Permalink Submitted by Steve Glasgow on Tue, 2009-12-01 17:17
We filed for a Reconsideration in 2007 due to a sale of property based on it being a one time event and got the increase dropped.
Steve