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IRMAA brackets is a term that every Medicare beneficiary should be aware of. The IRMAA tax brackets are something most feel strongly about. It’s an additional premium you must to pay for Medicare Part B and D depending on your income.
This means those with higher incomes may be subject to a higher monthly payment for their Medicare coverage. However, there are ways to maneuver Medicare IRMAA brackets.
Understanding IRMAA brackets in 2025, how they compare to IRMAA brackets in 2024 and the impact on healthcare costs helps you make informed Medicare decisions. The Center of Medicare/Medicaid Services (CMS) keeps an updated list of premiums and deductibles for reference.
This could involve carefully timing the realization of income, such as spacing out significant capital gains or Roth conversions. By doing so, you can effectively mitigate the impact of IRMAA on your financial situation. Work with a financial advisor specializing in tax planning to make informed decisions that align with your unique circumstances.
How Do I know if I’m Exposed to IRMAA?
The Social Security Administration (SSA) leaves no room for ambiguity when determining who is subject to the Income-Related Monthly Adjustment Amounts (IRMAA.) They precisely assess a person's modified adjusted gross income (MAGI) from their tax return two years prior.
This includes various sources of income, such as:
- wages
- self-employment income
- rental income
- capital gains
- tax-exempt interest
With MAGI as a key factor, the SSA ensures higher income earners are most commonly exposed to IRMAA. You are at risk of putting yourself into an IRMAA tax bracket if you don’t pay attention to your sources of income.
When managing your finances, avoiding being penny-wise and pound-foolish is crucial. Whether you're dealing with capital gains, Roth conversions, or selling stocks, unintended actions can have significant consequences.
It's important to stay informed and make informed decisions to protect your financial interests. Don't underestimate the value of seeking professional advice and thoroughly understanding the potential ramifications before taking any action. Remember, being proactive now can save you from costly mistakes down the road.
How to Calculate IRMAA for 2025?
Calculating IRMAA for Medicare in 2025 follows the same basic formula used in previous years. It all comes down to your MAGI as reported on your tax return from two years earlier (2023). The 2025 Medicare IRMAA brackets are expected to be slightly adjusted from 2024 due to annual cost-of-living updates, but the methodology remains consistent:
- Determine Your MAGI from 2023.
- Compare Your MAGI to the Official Medicare IRMAA brackets from the CMS.
- Identify Your IRMAA Surcharge, if any, based on where your MAGI falls within the 2025 IRMAA brackets.
What Is the “Right” Way to Move IRMAA Brackets?
Strategic income distribution across multiple tax years effectively avoids substantial movement within the IRMAA tax brackets. Careful income planning and management help reduce IRMAA tax bracket impacts and save money.
Understand IRMAA bracket thresholds and work with a financial advisor or tax professional to maximize savings while staying tax-compliant.
Proactively managing your taxes helps keep your financial goals on track and avoids unexpected IRMAA tax bracket increases. Make sure you're aware of the IRMAA tax brackets so that you can accurately assess your position.
What Is the “Wrong” Way to Move IRMAA Tax Brackets?
The IRMAA penalty is not something you should fear if you’re over the IRMAA bracket in 2025. It might be a paltry sum in the grand scheme of your financial planning and income. It’s not something that you must avoid if you can’t.
There are other ways to offset the expense if you find yourself in the IRMAA income bracket. With that said, the “wrong” way to move IRMAA tax brackets is making ill-informed decisions about income. There is no definite wrong or right way to move across IRMAA tax brackets.
It is worth considering accepting the IRMAA penalty in certain situations to maximize tax savings in the future. When it comes to understanding the implications of IRMAA tax brackets, there is no one-size-fits-all approach.
Frequently Asked Questions
How do I stop IRMAA surcharges?
There is good news for IRMAA payers. You can stop or reduce your IRMAA surcharge if you complete the SSA-44 Form. The Medicare IRMAA Lifechanging Event form allows you to avoid IRMAA payments if you exceed the IRMAA tax bracket.
All you need to do is ensure you qualify under the circumstances. It is best to consult a financial advisor before you fill out the SSA-44 Form.
What makes me eligible for the Medicare IRMAA Lifechanging Event Form (SSA-44 Form)?
The SSA-44 Form lists specific life-changing events that may allow those in higher IRMAA tax brackets to reduce or avoid payments. Some examples include:
- The death of a spouse
- Divorce
- Annulment
- Getting married
- Loss of income from work
- Loss of income from pension
- Losing a job
What will the IRMAA bracket change to in 2025?
The 2025 Medicare IRMAA brackets start from:
- $106,000 for individual tax filers
- $212,000 for joint tax filers
- $106,000 for married couples who file separately
In these cases, you must to pay the Medicare IRMAA. Keep in mind that 2026 IRMAA brackets may change.
Why am I paying IRMAA?
The Social Security Administration (SSA) charges IRMAA if your income exceeds certain thresholds.
The IRMAA tax brackets for 2025 starts from $106,000 for individual tax filers or $212,000 for joint tax filers. It starts from $106,000 for married couples who file separately. As a result, you will have to pay higher premiums for Medicare Part B and/or Part D.
How long do I pay IRMAA?
The SSA specifically evaluates MAGI based on their tax return filed two years earlier to determine eligibility. You pay IRMAA as long as you exceed the 2025 IRMAA bracket limits the current year.
What will IRMAA brackets be in 2026?
Official 2026 IRMAA brackets aren’t released yet. Historically, the brackets are adjusted each year to account for changes in average incomes, inflation, and overall Medicare costs.
Getting the Most Out of IRMAA
Your unique tax and financial circumstances determine how these IRMAA tax brackets will affect you. Work with financial planners who understand both IRMAA complexities and your unique situation. The experts at Asset Preservation Wealth and Tax, can give you personalized advice and guidance.
As fiduciaries, our top priority is always the best interests of our clients. We are committed to putting their needs ahead of our own. We’ll help you navigate the complexities of IRMAA tax brackets with confidence to make better financial decisions.
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Stewart Willis is the founder and president of Asset Preservation Wealth & Tax, a financial planning firm in Phoenix, Arizona. Investment advisory services offered through Foundations Investment Advisors, LLC, an SEC registered investment adviser.
The commentary on this blog reflects the personal opinions, viewpoints and analyses of the author, Stewart Willis, providing such comments, and should not be regarded as a description of advisory services provided by Foundations Investment Advisors, LLC (“Foundations”), an SEC registered investment adviser or performance returns of any Foundations client. The views reflected in the commentary are subject to change at any time without notice. Nothing on this website constitutes investment, legal or tax advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Personal investment advice can only be rendered after the engagement of Foundations for services, execution of required documentation, including receipt of required disclosures. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Foundations manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Any statistical data or information obtained from or prepared by third party sources that Foundations deems reliable but in no way does Foundations guarantee the accuracy or completeness. Investments in securities involve the risk of loss. Any past performance is no guarantee of future results. Advisory services are only offered to clients or prospective clients where Foundations and its advisors are properly licensed or exempted. For more information, please go to https://adviserinfo.sec.gov and search by our firm name or by our CRD # 175083.
