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keeperumiami, Senior Tax Expert & Financial Planner
Category: Social Security
Satisfied Customers: 7195
Experience:  Sr Tax Expert/Financial PlannerCPA/PFS (retired)Over forty years of advising individuals & small businesses
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I am being charged nearly $400/month for Medicare because my

Customer Question

I am being charged nearly $400/month for Medicare because my future x husband made a lot of money in 2014. I have been told I can get my regular income back if I finalize my divorce. Would I get any back pay?
JA: These retirement benefits are supposed to help us but they can be so complicated! The Retirement Expert will help you get the most benefits propertly. Is there anything else the retirement accountant should be aware of?
Customer: His income was $619980.00 because of an inheritance that I have nocontrol of. Over 1/2 of it went to taxes, plus we didn't get many of the deductions that we normaly get because he made too much money. We did file a joint return, but his inheritance it tied up in a corporation that I am not part of. It doesn't seem right that I am penalized for money I can't even tough.
Submitted: 11 months ago.
Category: Social Security
Expert:  keeperumiami replied 11 months ago.

Hello, my name is***** goal is to give you a complete & accurate answer. I am working on your request now & I will respond as soon as possible.

Expert:  keeperumiami replied 11 months ago.

Unfortunately, you will not be able to get any "back pay". I agree that it isn't right, but everything is based upon prior period's income, and there's no adjustment allowed; just a correction going forward.

However, perhaps you should discuss this with your divorce attorney as if you agreed to file a joint return with your husband, he would have saved a substantial amount of income taxes based upon that filing status, while you suffered the increase Medicare premiums.

Since you are still married, you can probably use that to your advantage for the 2016 tax year by suggesting that if you agree to file a joint return for 2016, he make up the excess you had to pay in Medicare premiums because of that income that you aren't sharing in.

I would think that you would have a very strong arguing point. Also, remember that you can't be compelled to file a joint return. If you were to file a Separate return using the Married Filing Separately filing status, he would have to do the same and that would most likely result in several thousand dollars of additional income taxes for him.

Please remember to rate my response as that is the only way I will receive credit for assisting you this evening.

Steve G.

Customer: replied 11 months ago.
isn't there something about a "windfall" that might get a reduction, or am I confused with something else.
Expert:  keeperumiami replied 11 months ago.

Well, I don't know if you're confused or not but the Windfall provisions relate to reductions of Social Security benefits when the recipient has another government pension based upon earnings not covered under the Social Security Retirement System; it's to adjust against so-called "double dipping".

It doesn't have anything to do with Medicare premiums, nor does it have anything to do with an inheritance affecting anything except increasing Medicare premiums. That isn't referred to anywhere in Social Security as a "windfall", even though to you & I it may be a "windfall", that has a completely different meaning in Social Security, as described above.

Please remember to rate my response as that is the only way I will receive credit for assisting you this evening.

Thanks very much,

Steve G.

Customer: replied 11 months ago.
because my x is considered an "employee" of his corp. he is paying employment taxes. He is already retired. will he ever be able to draw the extra taxes he is now paying?
Expert:  keeperumiami replied 11 months ago.

Unfortunately, the Social Security System doesn't work that way. We don't have "accounts" where our withholdings are deposited so that we can collect them later on. Many people that are collecting Social Security benefits are also paying Social Security taxes on their current earnings if they continue to work or have employment income after they "retire". In fact, I'm in that boat myself.

The only way that your husband's current earnings would affect his benefits would be if his current years earnings exceed one of the highest 35 years of his inflation adjusted earnings that enter into the computation of his Social Security benefits. This is all done automatically as each year's earnings are reported. It's complicated in actual implementation as the Social Security contribution earnings limits increased so much over the last 40 or 50 years. I remember when the contribution limit was $4,800. in wages, now in 2016 it's $118,500.

Steve G.

Customer: replied 11 months ago.
Thank you for your help. It gripes me that we are taxed for Social Security, it is our money, but that is the first place that cuts are made. For many of us this is our only income.
Expert:  keeperumiami replied 11 months ago.

That's right. That's why I'm retired but here too. It's pretty tough to live on just Social Security these days when even on Medicare, decent policies cost $400.+ a month + co-pays on prescriptions and who knows what else along the way.

Please remember to rate my response or I've stayed up for nothing >00<

Steve G.