IRMAA
At this time every year, the premium you pay for Part B of Medicare (the outpatient benefit) may adjust depending on the income you reported on your 2024 tax filing. As we discussed the first time we met to discuss Medicare, “means testing” is used to set the actual amount of both your Part B premium (paid to the federal government) and anything add-on for your Part D plan, whether it is stand alone or included in your MA plan. To be clear, IRMAA is a tax based on your income and is paid to the federal government for Medicare, parts B and D.
IRMAA (income related monthly adjustment amount) is the 6-tier table that shows what your actual premiums will be in 2026. This was included in the Medicare overview pamphlet I sent you when we first began to investigate your Medicare coverage. Here it is for 2026. The income levels shown come from the MAGI (Modified Adjusted Gross Income) from your taxes 2 years ago, so now it will be for 2024. If you are married and filing jointly, there is as dedicated column in the IRMAA table for that, versus filing singly. There are special rates for married filing separately as you can see.
Your MAGI amount is not on any line in your tax return. It is your AGI (Adjusted Gross Income) with additional income related to royalties or rents, foreign income, etc added. Ask your tax preparer to help you calculate this amount.
You need to double check to make sure that the income being used to determine your actual premiums corresponds to what is actually on your 2024 tax filing. This should adjust automatically, but it is always smart to check. Call Social Security if you find a discrepancy.
As the table indicates, the base rate for a Medicare member for the Part B premium in 2026 is $202.90, up from $185.00 in 2025. For the base level, there is no add-on to the Part D premium.
Some threats to having a manageable IRMAA amount are additional income like Roth conversions, large capital gains like business or real estate sales, severance packages, RMDs, etc etc. Hopefully, you can work with your financial planner to manage these income events to have the least impact on you as possible.
What if you did have a “windfall” income a couple of years ago, but your income has since fallen off. There is a form from Social Security (Form 44) that can be filled out and sent to SSA to request a re-evaluation for certain circumstances to avoid the IRMAA markup. Call me to get a copy of the form and we can discuss the sorts of exemptions that are possible (ie. retirement, work reduction, divorce, death of a spouse, loss of pension income, etc etc.)