Most people will pay the standard monthly Part B premium of $96.40 or $110.50 in 2010. Some people will pay a higher premium based on their modified adjusted gross income. Your monthly premium will be higher if you file an individual tax return and your annual income is more than $85,000, or if you are married (file a joint tax return) and your annual income is more than $170,000. For example; if you are married filing joint and earn $215,000 your premium will be $192.70. If you are married and file a separate return and have income of $86,000 your premium jumps to $250.50.

Social Security will use the income reported two years ago on your IRS income tax return to determine your premium.

Internal Revenue Service supplies your tax filing status, your adjusted gross income, and your tax-exempt interest income to the Social Security Administration to determine if you have an income related monthly adjustment amount (IRMAA). The Social Security Administration will add your adjusted gross income together with your tax-exempt interest income to get an amount called the modified adjusted gross income (MAGI).

The income-related monthly adjustment amount is effective from January 1 through December 31 each calendar year. The Social Security Administration will refigure your Medicare Part B premium amount again next year when the Internal Revenue Service updates the information.

(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).