IRMAA Management
Income two years prior can trigger Medicare surcharges (IRMAA). Managing income around the thresholds may reduce surcharges — it depends on your full income picture.
At a glance
- Category
- Retirement
- May be relevant for
- Medicare-age households
- Our approach
- Document review → proposal → implementation
- Service area
- Nationwide (office in Westlake Village, CA)
Whether this applies to you depends on your specific facts and circumstances.
Ask a CPA about your situationImportant: This page is for educational purposes only. It describes how this strategy may work under current law. Whether it is appropriate for you, and how to implement it correctly, depends entirely on your specific facts, timing, and documentation. This is not individualized tax advice. Speak with a licensed CPA before acting.
How it may work
IRMAA Management — a plain-English overview
The sections below describe how this strategy works under current tax law, what conditions may make it applicable, and what factors affect the outcome.
How IRMAA works
IRMAA (Income-Related Monthly Adjustment Amount) causes Medicare Part B and Part D premiums to increase in step-wise tiers above certain modified adjusted gross income (MAGI) thresholds. The surcharges are not trivial — a household at the highest tier pays several thousand dollars more per year in Medicare premiums than one below the first tier. The key timing wrinkle: premiums in the current year are based on MAGI from two years prior. So 2026 premiums are based on 2024 income.
The two-year lookback creates planning opportunity
Because IRMAA uses a two-year-prior income year, income management in any given year affects Medicare premiums two years later. A large Roth conversion, capital-gains realization, or RMD spike in one year may push you into a higher IRMAA tier for the following two premium years. Conversely, keeping income below a tier boundary in a given year preserves lower premiums two years out. This requires forward-looking planning — the decision being made today affects costs that appear two years from now.
IRMAA tiers and life-change exemptions
For 2025, the base IRMAA threshold begins at MAGI above approximately $106,000 for individuals and $212,000 for married filing jointly. There are five surcharge tiers above the base. Importantly, Social Security Administration (SSA) may grant a life-changing event exemption (Form SSA-44) in situations such as retirement, divorce, death of a spouse, or loss of income-producing property — allowing recalculation based on more recent income. If circumstances changed materially after the base year, this avenue is worth evaluating.
Document-first
What we'd review before recommending this strategy
We do not guess. We review the documents, propose, and implement. Here is what we'd want to see to evaluate whether this strategy may apply to you.
- MAGI for the relevant base year — all income components affecting the calculation
- Planned Roth conversions, capital gains realizations, or other taxable events in the base year
- RMD amounts and timing — the primary driver of income in many retirees' base years
- Whether a life-changing event exemption may be available
- Medicare Part B and D premium trajectory at current income levels
- Two-year forward projection — mapping today's income decisions to future premium tiers
Who this may fit
Profiles where this strategy comes up most
These are the client situations where we most commonly evaluate this strategy. Whether it applies to you depends on your specific facts.
Common Questions
Questions about IRMAA Management
Educational answers to questions we often hear when discussing this strategy with clients.
Can you appeal an IRMAA determination?
Yes. If your income has decreased due to a qualifying life-changing event (retirement, reduction in work, divorce, death of a spouse, loss of pension or employer settlement, or loss of income-producing property), you may appeal using Form SSA-44 to use a more recent year's income. The appeal process requires documentation of the event.
Educational content only
This page describes IRMAA Management for general educational purposes under current tax law. It is not individualized tax, legal, or investment advice. Whether this strategy is appropriate for you — and how it should be structured, documented, and reported — depends entirely on your specific facts, timing, and circumstances. Tax law changes frequently. Always consult a licensed CPA before acting on any information here.
We do not guess. We review the documents, propose, and implement.
Ask a CPA
Wondering if IRMAA Management applies to you?
Tell us about your situation and we'll follow up within one business day. We review the actual documents and give you a direct answer — no obligation.
- Document-first review — we start with your actual returns and records
- Clear explanation of what may apply and why
- No obligation — honest if there isn't enough value to act on
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Ready to find out what applies to your situation?
A discovery call is how we start. We review the documents and tell you honestly what may be worth pursuing.