Medicare premium surcharges and tax filing status

Jo – Texas: If you and your spouse are filing joint tax returns, can you change to filing separate individual returns to have the spouse making minimal money — under $85,000 — have her Medicare Part D premiums be at the lowest rate, versus both spouses’ premiums being calculated on their combined income?

Phil Moeller: It is possible to file as married with separate returns. This would reduce the Medicare high-income surcharge. Your note talks about Part D premiums but the surcharge has a much larger impact on Part B premiums. Here are details of the surcharges and their income trigger points.

There are a couple of points to keep in mind:

  1. There can be other benefits of filing a joint return that may be lost if you’re filing separately. I don’t pretend to know how you might be affected, but if I was in your shoes, I’d work with an accountant to make sure I was not making a mistake.
  2. The measure of income that triggers Medicare’s high-income surcharges is NOT adjusted gross income but a similar measure called modified adjusted gross income, or MAGI for short. Unless you understand how to calculate your MAGI, I would again suggest you get professional help.