What should we assume for IRMAA tripwires for our 2024 tax return?
Posted on July 26, 2024

Roughly 10% of those on Medicare have high enough income that triggers a surcharge of Medicare premiums that are deducted from monthly Social Security benefits. If your income is near or at this point, you want to plan your 2024 tax return to see if you can avoid a tripwire that triggers a surcharge of about $2,000 to $3,000 per year for married, joint filers (Half that for single filers.), and there are five tripwires. This post shows what I will be using as IRMAA tripwires for my planning for our 2024 return. They are lower than I posted a few weeks ago.

Details.

== Background ==

Those on Medicare pay a portion of Medicare’s cost for Part B – office visits to physicians, home healthcare and general preventive medicine, such as shots for vaccines. Those with high income (Modified Adjusted Gross Income or MAGI) pay a surcharge – IRMAA (Income Related Medicare Adjustment Amount) – for Part B and Part D – drug coverage.

I described how IRMAA tripwires were calculated in this post and on this pdf. Tripwires that trigger surcharges were set by tax law for calendar 2019 and are then adjusted annually for inflation. Inflation is the change in the average CPI-U inflation index for 12-month periods ending August. Medicare announces IRMAA tripwires each September just after the CPI-U for August is posted.

== Tripwires set Sept 2025 for IRMAA in calendar 2026==

The IRMAA tripwires issued 14 months from now – September 2025 – will use MAGI from your 2024 tax return to determine IRMAA for calendar 2026. This is two inflation-adjustments from the tripwires announced September 2023. (MAGI for this purpose is Adjusted Gross Income + Federal tax-exempt interest. These are on lines 11 and 2a of your 1040.)

I looked at the detail assumptions for predictions in my prior post, and I want to be more conservative for my tax planning for my 2024 return. I assume 0% inflation for the next two months and 1.8% inflation for the 12-month period ending August 2025. And then, to be conservative, I lowered my calculations: $1,000 lower for each tripwire for a single filer. Double that, or $2,000, for married, joint filers. Here’s the summary:

I’ll look at this again before I complete my final plan in November, but this will be good for my first draft of my tax plan for 2024 that I’ll work on next week.

Conclusion: About 10% of those on Medicare have high enough income that triggers surcharges to Medicare premiums that are deducted from Social Security benefits. You want to plan your tax return to make sure you don’t inadvertently stumble over a tripwire that could cost $2,000 or $3,000 for married, joint filers (half that for single filers). This post shows my assumptions for the tripwires that will apply to my 2024 tax return.