How to Manage IRMAA Medicare Premium Surcharges Through Strategic Tax Planning

In this article you’ll learn:

• IRMAA is a monthly surcharge applied to Medicare Part B and Part D premiums for higher-income beneficiaries.
• The government determines your surcharge eligibility by looking back at your Modified Adjusted Gross Income (MAGI) from two years prior.
• Because IRMAA is based on rigid income brackets, exceeding a threshold by even one dollar triggers the full surcharge for the entire year.
• Beneficiaries can mitigate these costs through proactive tax planning or by filing an appeal following specific life-changing events.

Introduction

As a Medicare beneficiary, or if you’re going to soon be receiving Medicare benefits, it can sometimes be a maze trying to figure out the facets of the program. Most people know what Medicare Part A is; that’s the free hospitalization part. Then there are Parts B, C, and D. For our discussion, we’ll be looking at Parts B and D. If you aren’t familiar with what those are, here is a brief overview:

Medicare Part B¹ has no total out-of-pocket maximum. The 20% Rule: After you pay your $283 deductible (the up-front cost), you typically pay 20% of the Medicare-approved amount for every doctor visit or surgery. It covers many wellness services and vaccinations at no cost.

Medicare Part D² is for prescription drug coverage. It has an out-of-pocket maximum. You pay your deductible (up to $615), then you pay your plan’s copays for each refill. Once your total spending on covered drugs hits $2,100, the insurance company and the government pick up 100% of the cost after that for the year.

Everything seems in order; some people get a Medicare Advantage or Medigap plan to simplify things and to make their costs more predictable.

Key point: The catch to all of this is when we zero in on Part B and Part D, we see that the premiums for these increase every year. Most people would expect that. What most people would not expect is to be hit with an additional surcharge on top of Part B and Part D premiums, called the Income-Related Monthly Adjustment Amount (IRMAA).

What Is IRMAA?

IRMAA is a surcharge that is added monthly to your Part B and Part D premiums³ should your income cross certain thresholds. It exists to cause higher-income Medicare beneficiaries to pay more of their own healthcare costs.

We’ll break down how this works in general (your individual situation is best reviewed with your tax planner).

The good news: Not all Medicare beneficiaries typically pay this surcharge.

Things could change, causing you to have to pay IRMAA: Changes in your income could push you into one of the IRMAA income brackets, causing you to have to pay the monthly surcharge for a year.

You can manage many aspects of this: planned tax strategies can often help you avoid these extra IRMAA payments.

IRMAA Details: Understanding the Monthly Surcharge

With Medicare Part B and Part D, what normally happens is those monthly premiums are deducted from your Social Security check. IRMAA (extra monthly surcharge⁴ added to the Part B and Part D premiums) kicks in when your income passes a certain threshold, and these surcharges increase the higher your IRMAA income bracket is. These brackets are defined using your Modified Adjusted Gross Income (MAGI).

The standard Part B premium for 2026 is $202.90. Part D is bought through insurance companies, so start with your standard Part D premium as a base. (If you are reading this after 2026, please consult Medicare⁵ or your insurance company for current Medicare premium amounts.)

Each year, IRMAA income brackets are updated. Here’s what they look like for 2026:

2026 IRMAA Brackets (Based on 2024 Income)

Sources: SSA.gov, Medicare.gov(If you are calculating beyond 2026, consult current IRMAA surcharge brackets as they change yearly.)

Key point: You can think of IRMAA as a mandatory “top-off” tax on both Medicare Parts B and D. IRMAA is not a gradual scale; if you cross an IRMAA income threshold by even one dollar, it triggers the full monthly surcharge for the entire year.

What counts as IRMAA income: For these calculations, you start with your Adjusted Gross Income (AGI) and then add to that items that are usually tax-exempt to arrive at your MAGI:

• Interest from municipal bonds and other tax-free sources.
• Any income earned abroad that was excluded from your gross income

How IRMAA is Calculated

Here’s how this works: For example, when calculating IRMAA for 2026, it will be based on your reported 2024 income. Medicare uses a two-year look-back to calculate your premiums because tax data for the most recent year isn’t yet available for everyone.

For example, when setting 2026 surcharges, the Social Security Administration (SSA) uses your 2024 tax return; it’s the most recent complete data on file. If this applies to you, the SSA will mail you notices explaining your costs.

How You Are Notified About Potential IRMAA for the Year

First you’ll receive a Predetermination Notice: This is a heads-up letter that informs you that the SSA plans to apply an IRMAA surcharge based on your tax data. You get 10 days to provide corrected info before it becomes official. If you get one of these letters, it’s recommended that you contact your tax planning advisor. (We will see in a moment how advance planning with your tax planner can potentially help you manage, reduce, or avoid IRMAA.)

After your Predetermination Notice is received, you will receive an Initial Determination Notice from the SSA. It arrives about 20 days after the first notice. This notice formally sets your premium and triggers your 60-day window to file a legal appeal. Find out more here with in-depth details from the SSA⁶.

For example, if your income has recently dropped due to retirement, divorce, loss of a spouse, or other life-changing event, you can appeal your IRMAA. It’s done through Form SSA-44⁷, and it could lower your premium.

Strategic Tax Planning, Income Timing, and IRMAA

IRMAA Planning is a Key Part of Tax Strategy

You may wonder why IRMAA should concern the majority of the population; it sounds like many people would be exempt due to the income thresholds. That’s true, but rising healthcare costs and “bracket creep” are pushing more retirees into paying IRMAA surcharges for the first time.

Tax strategies are key to managing if, how, and when IRMAA surcharges may affect you. Through prudent management of financial events and transactions, plus knowledge of how to request IRMAA reconsideration and appeals, you and your Moore’s tax planner can plan for and manage common IRMAA triggers like large Roth conversions, required minimum distributions (RMDs), or selling a long-held asset.

As with other tax planning issues, timing is key. YourMoore’s tax experts can help set up a plan so you won’t be taken off guard by surprise IRMAA charges.

Moore’s Wealth Management Can Help You Take Control of Your Retirement Budget

As we’ve seen, IRMAA is a Medicare surcharge that doesn’t affect all beneficiaries but can affect you when your income crosses certain thresholds. These thresholds are updated by the government every year, and it’s possible that your income may change from year to year, causing you to potentially have to pay IRMAA.

All that we’ve discussed here can be boiled down to a simple takeaway: proactive tax planning can keep your Medicare premiums at a more predictable cost.

Don’t let IRMAA take you by surprise. If you don’t know if your income may impact your Medicare premiums, we invite you to go over it with our professionals. Contact Moore’s Wealth Management today (770-535-5000) for expert retirement tax planning. Our guidance can help minimize, reduce, or potentially eliminate IRMAA.

References:

¹Medicare.gov. “What Part B Covers.” n.d. Accessed February 6, 2026.   https://www.medicare.gov/providers-services/original-medicare/part-b

²Medicare.gov. “What’s Medicare Drug Coverage (Part D)?” n.d. Accessed February 6, 2026.   https://www.medicare.gov/health-drug-plans/part-d

³LeValley, Donna. “What Is the IRMAA (Income-Related Monthly Adjustment Amount)?” Kiplinger.com. December 10, 2025. Accessed February 6, 2026. https://www.kiplinger.com/retirement/medicare/what-is-the-irmaa

⁴Social Security Administration. “Premiums: Rules for Higher-Income Beneficiaries.” 2026. Accessed February 6, 2026. https://www.ssa.gov/benefits/medicare/medicare-premiums.html

⁵Medicare.gov. “Costs.” 2026. Accessed February 6, 2026.  https://www.medicare.gov/basics/costs/medicare-costs

⁶Social Security Administration. “Program Operations Manual System.” Effective Dates: 06/10/2024–Present. Accessed February 6, 2026.  https://secure.ssa.gov/poms.nsf/lnx/0601190015

⁷Social Security Administration. “Medicare Income-Related Monthly Adjustment Amount—Life-Changing Event.” December 2025. Accessed February 6, 2026. https://www.ssa.gov/forms/ssa-44.pdf

All information contained herein is derived from sources deemed to be reliable but cannot be guaranteed. This material is provided as a courtesy and for educational purposes only.

The views expressed herein are those of the author and do not necessarily reflect the views of Steward Partners or its affiliates. All opinions are subject to change without notice. Neither the information provided, nor any opinion expressed, constitutes a solicitation for the purchase or sale of any security. Past performance is no guarantee of future results.

Steward Partners, its affiliates, and its Financial Advisors do not offer tax or legal advice. The tax information contained herein is general and is not exhaustive by nature. Federal and state laws are complex and constantly changing. You should always consult your own legal or tax professional for information concerning your individual situation.

This article may contain links to articles or other information that may be on a third-party website. Steward Partners does not imply an affiliation, sponsorship, endorsement with/of the third party or that any monitoring is being done by Steward Partners of any information contained within the linked site; nor do we guarantee its accuracy or completeness.  Steward Partners is not responsible for the information contained on the third-party website or the use of or inability to use such site.