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Retirees, Beware These Tax Traps on Social Security and Medicare

July 12, 2020

From the Barrons website

Susan Brickman’s monthly Medicare premiums jumped almost 70% this year, to $559, after the widow of two years found herself in a higher tax bracket as a single taxpayer.

“I felt offended that it happened,” says the 72-year-old Brickman, who lives in Charlottesville, Va. “I also feel, and this is crazy, ‘Why am I being punished for being a widow?’ ”

Medicare has a series of income limits that trigger increasingly higher payments for retirees. And it’s not just the rich who are affected. Brickman’s 2018 modified adjusted gross income of $163,414—derived from a combination of required minimum distributions, Social Security, and her husband’s pensions—was just enough to put her in the second-highest Medicare bracket (which begins at $163,000) and drive up her premium this year.

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