My income fluctuates significantly year to year from investment distributions. How can I avoid IRMAA surcharges when I have an unusually high-income year?

Question

Diane Andree · Accepted Answer

IRMAA charges are calculated each year based on your tax return of two years ago. In any one year, you have a fluctuation, you can appeal an IRMAA by filling out an SSA-44 form. this can be found on and downloaded from the SSA.gov website.

Answered by Diane Andree on April 11, 2025

Agent Licensed in NY

Answered by Diane Andree Medicare Insurance Agent

Clarence &quot;Mark&quot; Christiansen · Answer

Google this: "SSA-044", download, print, sign, date (OK complete the form)! and send it to the Social Security Administration ASAP! This is the form you should submit to help IRMAA go away. Good luck!

Answered by Clarence "Mark" Christiansen on April 22, 2025

Agent Licensed in WI, AZ, CA & 16 other states

Answered by Clarence "Mark" Christiansen Medicare Insurance Agent

David Bell · Answer

They use taxes from two years ago (so 2023's taxes for 2025), so you have time to prepare. The brackets change every year and they are tiered so if you just go over a little the penalty is is about $1,200 for the year. Work with your tax advisor if you will be near the current year's levels to reduce you income through things like charitable giving and other tax deductions. Balance the deduction spending against the expected penalty. To be honest, it's a great problem to have. Good work on the savings.

Answered by David Bell on April 17, 2025

Agent Licensed in ID, AZ, CA & 8 other states

Answered by David Bell Medicare Insurance Agent

Cassandra Mancuso · Answer

IRMAA surcharges  are based on your income from two years prior, so a single high income year can impact future Medicare premiums. If the spike and income was due to a one time event, such as a large investment distribution, you can file form SSA – 44 to request a reduction based on a life-changing event like works stoppage or reduced income.  
To help avoid surcharges in future years, my partner, Mike Secord; who is a local fiduciary, and I can help you explore investment distribution strategies tailored to keep your Medicare related income in check. We specialize in coordinating retirement income, and Medicare planning to help you keep more of what you’ve earned.

Steven Bleicher · Answer

The only way I can conceive in a windfall year is to ask your Certified Financial Planner if there may be a way to income-average. Not being a CPA, I do recall that years ago, that tactic worked nicely in spreading that amount over what I think was a 5- year period. But ask a CFP since he is your fiduciary!! Go online to find the CFP.org for a nearby member. I’m not contending to replace your CPA but just to get possible differing opinion.

Answered by Steven Bleicher on June 8, 2025

Broker Licensed in AZ

Answered by Steven Bleicher Medicare Insurance Agent

Aaron Solomon · Answer

Medicare IRMAA are based on your income history. They are usually 12-24 months behind in adjusting your income to figure your tax rate. You probably try to dollar cost averaging of your income. Personally, if you owe the money pay your Part B tax

Answered by Aaron Solomon on April 28, 2025

Broker Licensed in OH, LA & TX

Answered by Aaron Solomon Medicare Insurance Agent

Don Golding · Answer

To minimize IRMAA (Income-Related Monthly Adjustment Amount) surcharges on your Medicare Part B and Part D premiums when income changes, focus on strategies to reduce your Modified Adjusted Gross Income during years of high income. This includes making tax-deductible contributions to retirement accounts, donating appreciated assets to charity, and potentially delaying or timing Roth conversions to avoid unexpected income spikes.

Answered by Don Golding on April 14, 2025

Broker Licensed in TX, AL, AR & 5 other states

Answered by Don Golding Medicare Insurance Agent

Fred Manas · Answer

To avoid IRMAA surcharges when income fluctuates, consider proactive financial planning, potentially making charitable contributions, utilizing Roth IRA distributions, and spreading out large withdrawals over multiple years. You can also explore Roth conversions and consider maximizing contributions to traditional IRAs or 401(k)s in lower income years. 
Strategies to Avoid IRMAA:
Proactive Financial Planning:  Work with a financial planner to develop a strategy that minimizes your income in retirement, particularly during years with high investment distributions. 
Charitable Giving:  Make qualified charitable distributions (QCDs) or donate to a Donor Advised Fund (DAF) to reduce your Modified Adjusted Gross Income (MAGI), which is the basis for IRMAA calculations. 
Roth IRA Distributions:  Distributions from Roth IRAs are tax-free and don't count towards MAGI, making them a good option for withdrawals in years where income is high. 
Spreading Out Withdrawals:  Instead of taking a large withdrawal in one year, spread it out over multiple years to keep your income within IRMAA thresholds. 
Roth Conversions:  Convert traditional IRAs to Roth IRAs during years with lower income to reduce future tax liabilities and avoid counting those funds towards MAGI. 
Maximizing Contributions:  Maximize traditional IRA or 401(k) contributions in lower income years to reduce taxable income. 
Delayed Social Security:  Consider delaying your Social Security benefits to avoid the IRMAA in the years you're on Medicare, but be aware that this may increase your IRMAA in later years. 
Tax-Loss Harvesting:  Use tax-loss harvesting to offset any capital gains, which could reduce your overall income. 
Appeal the IRMAA:  If you experience a life-changing event, such as the death of a spouse or a loss of income, you can appeal the IRMAA and request a re-determination using Form SSA-44.

Vachik Chakhbazian · Answer

focus on strategies to lower your Modified Adjusted Gross Income (MAGI), which is used to calculate IRMAA. This can include shifting from traditional to Roth IRAs, maximizing tax-deductible retirement account contributions, and utilizing tax-efficient withdrawal strategies. You can also consider appealing the surcharge if you have a life-changing event that significantly impacts your income

Answered by Vachik Chakhbazian on April 11, 2025

Agent Licensed in CA, AL, AR & 22 other states

Answered by Vachik Chakhbazian Medicare Insurance Agent

Gary Haft · Answer

No one can avoid IRMAA, unless your MAGI is on or below the basic income. For 2025, if your household income is below $212,000 for a married couple or $106,000 for a single person, then you pay the standard base rate of $185/mo. Any income above these figures, you will pay a higher amount.

Answered by Gary Haft on May 26, 2025

Agent Licensed in FL, AL, DC & 9 other states

Answered by Gary Haft Medicare Insurance Agent

Kelly Linster · Answer

IRMAA looks back two years to determine your surtax. Consulting an account could help in smoothing out the IRMAA adjustments.

Robert Baez · Answer

If your income is above a certain limit 
(in 2025 $106,000 if you file individually or $212,000 if you’re married 
and file jointly), you’ll pay an extra amount in addition to your plan 
premium (sometimes called “Part D IRMAA”). You’ll also have to pay this 
extra amount if you’re in a Medicare Advantage Plan that includes drug 
coverage. This doesn’t affect everyone, so most people won’t pay an extra 
amount.

Tonya Mowan · Answer

If you're over 65 and have a year where your income is unusually high—like from investments—you could face higher Medicare premiums due to IRMAA. You might be able to avoid this by reporting a life change, like retirement, to Social Security using Form SSA-44. Planning your income or spreading distributions over time can also help lower the risk. Always talk with a tax or financial advisor to see what works best for your situation.

Answered by Tonya Mowan on June 16, 2025

Agent Licensed in AR

Answered by Tonya Mowan Medicare Insurance Agent

Ryan Ross · Answer

Great question! If your income jumps in a year due to investment distributions, you might face IRMAA (Income-Related Monthly Adjustment Amount) surcharges on your Medicare premiums. But here's how you might be able to avoid or reduce them:

1. File an appeal (Form SSA-44) – If the high income was a one-time event (like a large capital gain or distribution), you can explain it to Social Security and ask them to adjust your premiums based on your current income.

2. Strategic timing – Try to spread distributions over multiple years, or take them in years when your income is lower, if possible.

3. Work with a financial advisor – They can help you plan distributions to stay under IRMAA thresholds and explore tax-efficient strategies.

Want help with the IRMAA appeal process or figuring out how this impacts your Medicare? I’m here to help!

Adriana De la Cruz · Answer

That's a great question! One strategy is to look into 'qualified charitable distributions' from your IRA. This can lower your taxable income without affecting your distributions. Another option is to consider Roth IRA conversions – they can increase your taxable income in the short term, but withdrawals in retirement won't be taxed, which could help you avoid IRMAA surcharges down the road. You might also want to look into an IUL, or Indexed Universal Life insurance policy. They can provide tax-free growth and tax-free withdrawals, which could be beneficial in years with fluctuating income.

Answered by Adriana De la Cruz on May 23, 2025

Broker Licensed in TX, AZ, CA & NM

Answered by Adriana De la Cruz Medicare Insurance Agent

Arsenio Sallie · Answer

Avoiding IRMAA (Income-Related Monthly Adjustment Amount) surcharges can be challenging, especially with fluctuating income. Here are some strategies you might consider:

1. **Income Management:** Plan your investment distributions carefully. If possible, spread out distributions over multiple years to avoid spiking your income in any single year.

2. **Tax-Advantaged Accounts:** Maximize contributions to tax-advantaged accounts like IRAs or 401(k)s, which can reduce your taxable income.

3. **Roth Conversions:** Consider converting traditional IRA funds to a Roth IRA in years when your income is lower, which can help manage taxable income in future years.

4. **Charitable Contributions:** Make charitable contributions, which can be deducted from your taxable income if you itemize deductions.

5. **Harvesting Losses:** Use tax-loss harvesting to offset gains with losses, potentially reducing your taxable income.

6. **Filing an Appeal:** If your income has decreased due to a life-changing event (like retirement, divorce, or loss of income-producing property), you can file an appeal with the Social Security Administration using form SSA-44 to request a reduction in your IRMAA.

7. **Consult a Professional:** Consider working with a financial advisor or tax professional who can help you strategize and manage your income effectively.

Let me know if you have any more questions!

My income fluctuates significantly year to year from investment distributions. How can I avoid IRMAA surcharges when I have an unusually high-income year?

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My income fluctuates significantly year to year from investment distributions. How can I avoid IRMAA surcharges when I have an unusually high-income year?

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