Page 10 - Supplement to Income Tax 2019

Recent Tax Developments*

In addition, employees and self-employed workers potential Part B surcharge for 2019 is based on your MAGI
will have to pay on Form 8959 the Additional Medicare for 2017. Social Security obtains your filing data from the
tax of 0.9% on earnings over $200,000 if single, head of IRS to determine any surcharge. If your 2017 tax return
household, or qualifying widow/widower, $250,000 if information was not available, Social Security used your
married filing jointly, or $125,000 if married filing separately. 2016 tax return data to determine if you owe a surcharge
These thresholds do not change annually, as the statute for 2019. If you have been notified by Social Security
authorizing the tax does not provide an inflation adjustment. that you must pay a surcharge, but your MAGI has been
reduced by a life-changing event, you may be able to reduce
or eliminate the surcharge. For example, if a surcharge for
Medicare Part B and Part D Premiums for 2019 was based on your 2017 MAGI but your income was

2019 — (page 630) reduced in 2018 or 2019 because of a life-changing event,
you can ask Social Security to refigure your 2019 premium
using your 2018 tax information or your estimated 2019
Medicare Part B premiums cover eligible physician information (Social Security Form SSA-44 can be used or
services, outpatient hospital services, outpatient laboratory you can call 1-800-772-1213).
and diagnostic services, certain home health services, The premium table below assumes that Social Security
and durable medical equipment. For 2019, the standard used 2017 filing status and MAGI to determine any
monthly Part B premium is $135.50, but about 3.5% of surcharge for 2019. For 2019, there generally are five
all Part B enrollees pay less than $135.50 under the “hold surcharge tiers, whereas for 2018 and earlier years, there
harmless” rule, which prevents their Part B premium from were only four tiers of surcharge. The Bipartisan Budget
increasing by more than the increase they received in their Act of 2018 applies the new top tier to single individuals
Social Security benefits for 2019. with MAGI of $500,000 or more, and to married persons
Most Medicare beneficiaries who are not eligible for the filing jointly with MAGI of $750,000 or more. However,
hold-harmless limitation will pay the standard monthly for married persons filing separately who lived with their
premium of $135.50 in 2019, but if their MAGI for 2017 spouse at any time in 2017, only the highest two surcharge
exceeded $85,000, or $170,000 if married filing jointly tiers apply. As shown in the table below, the minimum
for 2017, they must pay a monthly surcharge in addition surcharge is $54.10 per month and the maximum surcharge
to the standard premium; see the next paragraph for is $325 per month.
surcharge details.
Part D premium surcharge applies if Part B surcharge
Part B surcharge for 2019 based on 2017 MAGI and filing applies. If you are subject to the Part B surcharge, you also
status. Whether the premium surcharge applies depends must pay a surcharge in addition to your regular monthly
on your adjusted gross income plus tax-exempt interest premium for Part D prescription drug coverage. For 2019,
(MAGI) for the year that is 2 years prior to the year for the Part D surcharge ranges from $12.40 to $77.40 per
which the surcharge is determined. That is why the month, as shown in the last column of the table below.

6 | Supplement to J.K. Lasser’s Your Income Tax 2019