Seniors and retirees may have less to worry about when it comes to day-to-day financial operation of a business, but there are tax matters that apply to them once they reach a certain age. Here are a couple of updates of which seniors should be aware.
Medicare Rates to Increase
The changes to supplemental coverage rates have been in the works for some time. Some upper income seniors receiving Medicare benefits will experience higher premiums next year. Single individuals with modified adjusted gross income (AGI) over $85,000 and couples with AGI over $170,000 may experience premium surcharges on Medicare Parts B and D. The premium increases will be more for higher income levels, and premiums could reach a maximum of $370.80 per month.
If you reached age 70-1/2 last year but opted to delay taking the Required Minimum Distribution (RMD) from your individual retirement account (IRA) until this year, you must take it by April 1, 2017 – even though it is a Saturday. You can calculate your RMD based on the balanced of your IRAs as of December 31, 2015 (remember, you delayed the RMD). Divide each balance by the factor for your age, which is 27.4 for most people who turned 70-1/2 in 2016. (If your spouse is more than 10 years younger than you, the factor is larger.) The result will be the RMD from each account, but you can pay the combined amount from one account if you’d prefer.
If you have questions on these or other tax topics, please contact Gray, Gray & Gray’s Tax Department at (781) 407-0300.