We hear warnings about getting too much taxable income and crossing a MAGI breakpoint which will increase your Medicare premium.
This extra charge, called IRMAA, is based on your MAGI with a 2 year lag. MAGI is basically your AGI plus. For simplicity, assume MAGI is the AGI.
My employer’s post-retirement, pre-medicare health insurance was $1000 per month each. The highest Medicare premium is $578 per month each – for a couple with $750,000 income. That’s still about half what my employer’s plan was. And that high only for a couple with a super high income. Doesn’t really seem that onerous.
I wanted to get an idea of how much the IRMMA would be in relation to the AGI and the income tax as the AGI crosses over the IRMAA breakpoints. The table below shows the ranges of each ITMAA bracket.
The below table is for a couple filing MFJ using 2022 figures.
AGI / bkpt Taxable IRMAA ttl Tax-MFJ $181,999 $154,199 $0 $25,421 $182,000 $154,200 $1,632 $25,421 <<< breakpoint $227,999 $200,199 $1,632 $35,541 $228,000 $200,200 $4,080 $36,090 <<< breakpoint $283,999 $256,199 $4,080 $49,530 $284,000 $256,200 $6,528 $49,530 <<< breakpoint $339,999 $312,199 $6,528 $62,970
It doesn’t seem like it is very important to take extraordinary measures to avoid crossing an IRMAA threshold. It’s more of a “prefer to avoid”.
Although, you don’t want to cross a threshold by $1. That $1 may cost you two thousand dollars.
1/29/22 Medicare premium IRMAA effect.txt