**IRMAA (Income-Related Monthly Adjustment Amount)** is a Medicare surcharge for high earners added to Part B (medical insurance) and Part D (prescription drug) premiums. **Who pays IRMAA (2025 income thresholds)**: **Single filers**: MAGI > $103,000. **Married filing jointly**: MAGI > $206,000. **Married filing separately** (lived with spouse any time during year): MAGI > $103,000. **2-year lookback rule**: Your 2025 IRMAA is based on **2023 tax return** MAGI (most recent return available to SSA). **2025 IRMAA brackets**: **Tier 1** (Single $103,001-$129,000 / Joint $206,001-$258,000): Part B +$69.90/month, Part D +$12.90/month = **+$82.80/month** total surcharge. **Tier 2** (Single $129,001-$161,000 / Joint $258,001-$322,000): Part B +$174.70, Part D +$33.30 = **+$208/month**. **Tier 3** (Single $161,001-$193,000 / Joint $322,001-$386,000): Part B +$279.50, Part D +$53.80 = **+$333.30/month**. **Tier 4** (Single $193,001-$500,000 / Joint $386,001-$750,000): Part B +$384.30, Part D +$74.20 = **+$458.50/month**. **Tier 5** (Single >$500,000 / Joint >$750,000): Part B +$419.30, Part D +$81 = **+$500.30/month**. **Base premiums (no IRMAA)**: Part B: $174.70/month (2025 standard).

Part D: Varies by plan ($0-$100/month average $35). **Example**: Single filer, $150,000 MAGI (Tier 2).

Part B: $174.70 base + $174.70 IRMAA = $349.40/month.

Part D: $35 plan + $33.30 IRMAA = $68.30/month. **Total Medicare**: $349.40 + $68.30 = **$417.70/month** ($5,012/year vs $2,516 base = **99% higher cost**). **Who is exempt**: MAGI ≤ $103,000 single / $206,000 joint (pay only base premiums, no surcharge).

**MAGI (Modified Adjusted Gross Income) for IRMAA** = Adjusted Gross Income (AGI) + Tax-exempt interest. **Step-by-step calculation**: **Step 1**: Find your **AGI** (Adjusted Gross Income) from **Form 1040, Line 11**.

Includes: Wages (W-2), self-employment income, taxable Social Security, pensions, IRA/401k distributions, capital gains, rental income, dividends, interest. **Excludes**: Roth IRA withdrawals (tax-free), HSA withdrawals (qualified), municipal bond interest (tax-exempt), life insurance proceeds, inheritances, gifts. **Step 2**: Add **tax-exempt interest** (Form 1040, Line 2a).

Example: $5,000 municipal bond interest. **Step 3**: MAGI = AGI + Tax-exempt interest. **Example calculation** (2023 tax year → determines 2025 IRMAA): Wages: $80,000.

Taxable Social Security: $20,000.

IRA distribution: $25,000.

Capital gains (stock sale): $30,000.

Tax-exempt interest (muni bonds): $8,000. **Step 1**: AGI = $80k + $20k + $25k + $30k = **$155,000**. **Step 2**: Tax-exempt interest = $8,000. **Step 3**: MAGI = $155,000 + $8,000 = **$163,000**. **IRMAA tier**: Single filer, $163,000 MAGI = **Tier 3** (Part B +$279.50/month). **Common MAGI pitfalls**: (1) **Roth conversions**: Taxable in conversion year → Increases MAGI → IRMAA spike 2 years later.

Convert $100k Roth in 2023 → IRMAA surge in 2025. (2) **Large capital gains**: Selling appreciated stock/property → One-time MAGI spike → 1 year of high IRMAA. $200k gain in 2023 → Pay extra IRMAA all of 2025. (3) **Pension lump sum**: Taking full pension in 1 year vs annuity → MAGI spike. (4) **Required Minimum Distributions (RMDs)**: Start at age 73 (2025 rules) → IRA withdrawals increase MAGI permanently. **MAGI vs AGI difference**: For most retirees, MAGI ≈ AGI (few have tax-exempt interest).

Municipal bond investors: MAGI > AGI by bond interest amount.

**Yes, you can appeal IRMAA** if you experienced a **life-changing event** that reduced your income. **Qualifying life-changing events (Medicare Prescription Drug Coverage and IRMAA Life-Changing Event form SSA-44)**: (1) **Marriage**: Income drops due to spouse's lower/no income. (2) **Divorce or annulment**: Loss of spouse's income. (3) **Death of spouse**: Widowed, now filing single with lower income. (4) **Work stoppage/reduction**: Retirement, job loss, reduced hours. (5) **Loss of income-producing property**: Sale of rental property, business closure, involuntary loss (disaster, theft). (6) **Loss of pension**: Employer bankruptcy, pension termination. (7) **Employer settlement payment**: Received in prior year, not recurring. **How to appeal (SSA-44 form)**: **Step 1**: Gather evidence.

Updated tax return (if filed), W-2s showing reduced wages, pension termination letter, divorce decree, death certificate. **Step 2**: Complete **Form SSA-44** (Medicare IRMAA Life-Changing Event).

Available at SSA.gov or local SSA office. **Step 3**: Submit form + evidence to Social Security Administration (SSA).

Online: SSA.gov/medicare/irmaa (requires my Social Security account).

In-person: Local SSA office.

Mail: Address on form. **Step 4**: SSA reviews (30-60 days). **Step 5**: If approved, IRMAA recalculated using **projected current year income** (not 2-year lookback).

Refund of overpaid IRMAA (credited to future months). **Example appeal scenario**: **2023 income**: $250,000 (working full-time). **2025 IRMAA determination**: Based on 2023 = Tier 4 ($384.30 Part B surcharge). **2024 event**: Retired in January 2024, income dropped to $80,000 (pension + Social Security). **Appeal action**: File SSA-44 with 2024 income projection ($80,000 < $103,000 threshold). **Result**: IRMAA eliminated for 2025 (pays only base $174.70 Part B). **Refund**: $384.30 × months already paid. **Events that do NOT qualify**: General market downturns (stock portfolio loss without sale).

Voluntary early retirement (planned, not involuntary).

Inheritance (not considered income for IRMAA). **Appeal deadline**: No strict deadline, but earlier = more months of refund.

Typically file within 3 months of receiving IRMAA notice. **Success rate**: ~70% approval if proper documentation provided (SSA data).

**IRMAA is deducted directly from Social Security benefits** if you receive both Medicare and Social Security. **Deduction process**: **Step 1**: Social Security Administration (SSA) determines your IRMAA based on 2-year-old tax return. **Step 2**: SSA sends **IRMAA Initial Determination Notice** (~November-December before IRMAA year). **Step 3**: Medicare premiums (Part B base + IRMAA) automatically deducted from monthly Social Security check. **Example** (2025): Social Security benefit: $2,500/month.

Part B base: $174.70.

IRMAA (Tier 2): $174.70 surcharge. **Total Part B**: $349.40. **Net check**: $2,500 - $349.40 = **$2,150.60**.

Part D IRMAA ($33.30) billed separately by Part D plan (not deducted from Social Security). **Hold Harmless provision** (protects some beneficiaries): **Who is protected**: Social Security recipients enrolled in Part B **before December 2023** (for 2025) AND receiving benefits. **Protection**: Your Part B premium increase cannot exceed your Social Security COLA increase. **Example** (2025 COLA 3.2%): Social Security: $2,000/month → **$2,064/month** (3.2% COLA = +$64).

Part B 2024: $174.70 → Part B 2025: $185 (hypothetical $10.30 increase). **Hold harmless limit**: Premium increase capped at $64 (your COLA).

So you pay $174.70 + $64 = $238.70 (not full $185 base). **IRMAA override**: Hold harmless **does NOT apply to IRMAA surcharges**.

If you hit IRMAA threshold, full surcharge is charged regardless of COLA.

Example: $2,000 Social Security, $64 COLA, $174.70 IRMAA surcharge.

Deduction: Base $174.70 + IRMAA $174.70 = **$349.40** (exceeds $64 COLA).

New net check: $2,064 - $349.40 = **$1,714.60** (lower than 2024 $1,825.30). **Result**: IRMAA can cause your net Social Security check to **decrease** despite COLA increase. **Not receiving Social Security yet**: Medicare premiums billed quarterly by CMS (Centers for Medicare & Medicaid Services).

Pay by check, online, or automatic bank draft.

**Marriage**: Can trigger IRMAA increase or decrease depending on combined income. **Scenario 1 (IRMAA increases after marriage)**: **Before marriage**: Both spouses MAGI $90,000 each (single filers, $180,000 total).

Both pay base Medicare premiums (no IRMAA). **After marriage**: Combined MAGI $180,000, married filing jointly. **Still under $206,000 joint threshold** → No IRMAA (lucky!). **Scenario 2 (IRMAA kicks in)**: Spouse A: $120,000 MAGI (single, pays Tier 1 IRMAA).

Spouse B: $110,000 MAGI (single, pays Tier 1 IRMAA). **After marriage**: Combined $230,000 MAGI (married joint). **Joint threshold $206,001-$258,000 = Tier 1** → Both pay Tier 1 IRMAA (same as before marriage). **Scenario 3 (IRMAA increases significantly)**: Spouse A: $150,000 MAGI.

Spouse B: $200,000 MAGI. **After marriage**: Combined $350,000 MAGI. **Joint threshold $322,001-$386,000 = Tier 3** → Each pays +$333.30/month IRMAA (vs Tier 2 $208/month before marriage). **Annual cost**: ($333.30 - $208) × 12 × 2 people = **+$3,008/year** higher Medicare costs due to marriage. **Marriage penalty**: Married filing jointly thresholds are NOT double single thresholds.

Single Tier 1: $103,001-$129,000 (range $26,000).

Joint Tier 1: $206,001-$258,000 (range $52,000) = Exactly double (fair).

But: Single top tier: >$500,000.

Joint top tier: >$750,000 (only 1.5x, not 2x). **Marriage IRMAA appeal**: File **Form SSA-44** in year of marriage with projected combined income.

If marriage occurred in 2024 and reduces household income (e.g., one spouse stops working), appeal 2025 IRMAA using 2024 projected income. **Divorce**: Triggers IRMAA **reduction** if now filing single with lower income. **Example**: Married joint MAGI $350,000 (each pays Tier 3 IRMAA).

Divorced 2024, each now has $150,000 income (single). **Appeal action**: File SSA-44 with 2024 income projection. **Result**: 2025 IRMAA recalculated as single $150,000 = Tier 2 (saves $1,504/year each). **Married filing separately** (lived together): **Harsh penalty**.

IRMAA threshold for married separate living together: >$103,000 (same as single).

But cannot use single brackets (forced into highest IRMAA tiers quickly).

Example: Spouse A: $120,000 income, married separate. **Pays Tier 4 IRMAA** ($458.50/month surcharge) vs Tier 1 if filed joint. **Avoid unless special circumstances** (Medicaid spend-down).

**Top 10 IRMAA avoidance strategies**: **1.

Roth conversions BEFORE Medicare (age <65)**: Convert traditional IRA to Roth at ages 62-64.

Pay conversion tax now (no IRMAA yet).

At 65+, take Roth withdrawals (tax-free, not counted in MAGI) → No IRMAA. **Example**: Convert $500k at age 63-64 over 2 years.

Pay ~$60k tax (24% bracket).

At age 70+, withdraw $50k/year Roth (MAGI stays <$103k) → Save $5,000/year IRMAA × 20 years = $100k saved. **2.

Qualified Charitable Distributions (QCDs)**: Age 70½+, donate up to $105,000/year (2025) from IRA directly to charity. **Benefit**: Satisfies RMD but does NOT count toward MAGI. **Example**: RMD $40,000, donate $20,000 via QCD.

MAGI only increases $20,000 (not $40,000).

Keeps you under IRMAA threshold. **3.

Time capital gains strategically**: Spread large stock sales over multiple years to avoid IRMAA spike. **Bad**: Sell $300k stock in 1 year → MAGI spike → 1 year Tier 5 IRMAA ($6,004 wasted). **Good**: Sell $100k/year × 3 years → Stay in Tier 1 or avoid IRMAA → Save $4,000+. **4.

Harvest capital losses**: Offset gains with losses to reduce MAGI.

Sell losing stock to cancel out $50k gain → MAGI reduction = $50k → May drop IRMAA tier. **5.

Use HSA in retirement**: Withdraw HSA for qualified medical expenses (tax-free, not in MAGI). **6.

Delay IRA withdrawals**: Take only RMD minimums.

Excess cash needs → Use Roth, HSA, taxable account (lower MAGI impact). **7.

Municipal bonds**: Tax-exempt interest does NOT count toward AGI, but DOES count toward MAGI.

Still raises IRMAA.

Better: Use Roth or taxable stock dividends (qualified dividends taxed 0-20%, can be timed). **8.

Married couples - income splitting**: If one spouse works and other retired, max out spouse's 401k ($30,500 age 50+) to reduce household MAGI. **9.

Business owners - maximize deductions**: Self-employed health insurance deduction (reduces AGI).

Solo 401k contributions ($76,500 age 50+).

Depreciation and expenses (reduce net income). **10.

Appeal for life-changing events**: Retired mid-year? File SSA-44 immediately with projected income (don't wait 2 years). **Avoid**: Taking large pension lump sum (spikes 1 year MAGI).

Selling rental property in 1 year (spread over 1031 exchange or installment sale). **Key threshold targets**: Stay under $103,000 single / $206,000 joint to avoid ANY IRMAA.

Worst tiers to fall into: Tier 2-3 ($208-$333/month surcharge).

Plan income to stay just under tier cutoffs ($129k, $161k, $193k single).