Outrunning Medicare IRMAA
Some of you are aware of this acronym, IRMAA. But, what is it, and how could it affect you?
IRMAA stands for Income Related Monthly Adjustment Amount. It is a government surcharge added to your monthly Medicare Part B and Part D Premium if your Adjusted Gross Income exceeds certain government income thresholds.
A client recently said to me, “We’ve finally outrun IRMAA”, which I thought was a clever way to phrase the situation they were in. See, this year’s IRMAA is based on a 2-year look-back from tax-year 2023. In her situation, they had a large income year in 2022, which would have significantly increased their payment to Medicare. Since they had access to a pretty decent employer-based health insurance, they stayed put until the IRMAA look-back rolled into the next tax year.
The Medicare IRMAA surcharge is on a rolling system. So, if you continue to work past age 65 and have significant ups and downs in your income, then some years you might be subject to the surcharge and some years you might not.
A simple search-engine web search for “Medicare IRMAA” should pull up multiple resources that dive deep into this issue.
Make sure you are looking at the right numbers! Keep in mind:
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The tax year the government is basing their calculations on (2-year look-back)
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Marital status – if married, the government allows for a higher income threshold
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Know your Adjusted Gross Income (AGI)
Medicare IRMAA is a Medicare topic, but most professional accountants will be very familiar with this part of the law. You should seek counsel from them when calculating AGI and for other tax related guidance. I am not a professional accountant, and can only professionally guide you with your Medicare insurance.
Whether you are subject to Medicare IRMAA or not, I would be happy to discuss your Medicare insurance with you. Give me a call today at (770) 826-9931 or email me at Jay@SeniorSourceMedicare.com