New Taxes For People Making Under $250K??

Our government has repeatedly told us that there will be no new tax increases for people making less than $250,000 per year.  But for many social security income recipients, this may not be the case.  At this point it looks as if there will be no cost-of-living adjustment for social security beneficiaries in 2010 (and the Congressional Budget Office projects that there may not be another Social Security cost-of-living increase until 2013).  There is a “hold harmless” provision that says that if you do not receive a cost-of-living increase to your social security benefit, your Medicare part B premiums will not be increased in that year.  This all sounds great and seems to make a lot of sense.  But there are really two problems with it.

First, even though your Medicare part B premiums won’t go up in that year, the cost of everything else you buy will.  The cost of healthcare, food, utilities, gasoline & everything else you buy will increase in costs every year no matter what you do.  So while not paying more for your Medicare part B premiums will be nice, it’s hardly as nice as a cost-of-living increase in your social security check would be.

Secondly, what they don’t come out and say is that if you are an individual with a modified adjusted gross income of over $85,000, the “hold harmless” provision does not apply to you.  So if you’re in that boat, your Medicare part B premiums will continue to increase each year.  And these incrases are likely to be higher than normal because Medicare part B still needs to take in the same amount of revenue to cover it’s costs and pay benefits.

So isn’t this really a tax increase in disguise?  Maybe it’s technically not called a “tax”, but it’s still a “revenue generator” for our government, which is the same as a tax.  And this will apply to a whole lot of individuals who’s income is far less than $250K.  How many more “revenue generators” will be disguised this way in the years to come?  Costs continue to rise, and so do our taxes.

With a little bit of planning you can reduce your taxable income to bring it under this $85,000 level so that you’re not exposed to this kind of “taxation”.  Contact us now if you would like to discuss how we can help you do this and save yourself unnecessary taxation.

Also, if you would like to see if you can save tons of money on your Medicare Supplement insurance to cover the things that Medicare doesn’t cover, go to www.Great-Financial-Planning.com/best-medicare-supplement.html.

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