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Just received my SS info for next year. They have increased…

Just received my SS...

Just received my SS info for next year. They have increased my benefit deduction saying I had an increase in income for 2017. This increase ia due to a capital gain on sale of some rental property. I thought SS was based on earned income (only). Is this right? Also, since my husband and I filed jointly, this higher deduction has been taken from both of us individually. What is right here?

Accountant's Assistant: What are the assets or property for this capital gain?

It was real estate and the capital gain was $505,000.00

Accountant's Assistant: Anything else you want the Retirement Accountant to know before I connect you?

I don't think so.

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Answered in 8 minutes by:

11/26/2018

Social Security Expert: lev-ssa, Retirement and Benefits replied 4 years ago

lev-ssa, Retirement and Benefits

Category: Social Security

Satisfied Customers: 64,316

Experience: Retirement Planning, Benefit Qualification, Taxes, International Issues

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I thought SS was based on earned income (only). Is this right?

Yes - that is correct - your gross social security benefit amount is based on your average earned income for past 35 years in which your indexed earning was the most.

However - deductions you mentioned are Medicare premiums which are not based on earned income only.

Medicare premiums are based on gross income.

The SSA traditionally based Medicare premiums on income reported two years before.

If your income is above a certain level, you may have to pay an Income-Related Monthly Adjustment Amount (IRMAA).

For instance - Medicare premiums for 2019 are determined in October 2018 and based on income in 2017 - that is the latest information of income available at that time.

If you file jointly - premiums are determined based on joint income.

Correspondingly, Medicare premiums for 2020 will be determined in October 2019 and will be based on income in 2018, etc.

Let me know if any clarification needed.

Customer reply replied 4 years ago

Thank you. I understand now. But I do have another question. Since we filed jointly, the $505,000.00 capital gain applies tp our joint account. But we are both subject to the increased IRMAA amount of $$297.90 according to our benefits letter. Shouldn't just one of us be subject to this increased amount or should it be "shared" between the two of us?please do not call me.You can't answer my question?

Social Security Expert: lev-ssa, Retirement and Benefits replied 4 years ago

You both will be subject to IRMAA based on joint income.

However the rate schedule is different for for married couples and for singles.

If you do not need the phone service - just ignore - that is automatically generated.

Just keep in mind that such option exists in case you will need it in future.

You can request that Social Security revisit its decision if you have experienced a life-changing event that caused an income decrease.

Specifically - if you or your spouse stopping work or reducing the number of hours you work or your income changed significantly - that will be considered as a life-changing event and may be considered for premium reduction.

To request a new initial determination - use this form -

https://www.ssa.gov/forms/ssa-44.pdf

Let me know if that helps.

Customer reply replied 4 years ago

Thank you. Last question: will this happen again, this increase in the deduction, in 2020? Or is this just for our 2019 benefit year?

Social Security Expert: lev-ssa, Retirement and Benefits replied 4 years ago

Medicare premiums for 2020 will be determined in October 2019 and will be based on your income reported on 2018 tax return.

lev-ssa, Retirement and Benefits

Category: Social Security

Satisfied Customers: 64,316

Experience: Retirement Planning, Benefit Qualification, Taxes, International Issues

Verified

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Customer reply replied 4 years ago

Thank you.

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