Sunday, February 7, 2021

IRMAA & MAGI

What are they? Are different acronyms for the same thing?

IRMAA (pronounced Irma) stands for Income Related Monthly Adjustment Amount. This is what can increase the monthly premium of Part B from $148.50 to a max of $504.90.

MAGI (pronounced Maggie) stands for Modified Adjusted Gross Income. This is a reference that even the tax free income that doesn't impact your AGI will be used to calculate whether you have an IRMAA or not.

Think of them as ugly sister tax collectors who will come to crash your party. There are many of them and people affected are said to "have an Irma or a Maggie." If you see Maggie, Irma will follow. Sometimes Irma comes to the party alone. They are the reason a lot of people refuse or can't afford Part B.

Here is the IRMAA table for 2021 from Medicare.gov. The first column lists MAGI... if you had tax-free income (municipal bond interest, foreign income, IRA contributions, 100% not 85% Social Security Income, etc), you can't count on your AGI to find your place. Make sure to check with a tax advisor and do your research. 

who file 

individual tax returns with income:

Beneficiaries who file

joint tax returns with income:

Income-related monthly adjustment amount

Total monthly premium amount

Less than or equal to $88,000

Less than or equal to $176,000

$0.00

$148.50

Greater than $88,000 and less than or equal to $111,000

Greater than $176,000 and less than or equal to $222,000

59.40

207.90

Greater than $111,000 and less than or equal to $138,000

Greater than $222,000 and less than or equal to $276,000

148.50

297.00

Greater than  $138,000 and less than or equal to $165,000

Greater than $276,000 and less than or equal to $330,000

237.60

386.10

Greater than $165,000 and less than $500,000

Greater than $330,000 and less than $750,000

326.70

475.20

Greater than or equal to $500,000

Greater than or equal to $750,000

356.40

504.90

Premiums for high-income beneficiaries who are married and lived with their spouse at any time during the taxable year, but file a separate return, are as follows: 

Beneficiaries who are married and lived with their spouses at any time during the year, but who file separate tax returns from their spouses:

Income-related monthly adjustment amount

Total monthly premium amount

Less than or equal to $88,000

$0.00

$148.50

Greater than $88,000 and less than $412,000 

326.70

475.20

Greater than or equal to $412,000

356.40

504.90




Usually shows up when first retiring and your two previous years of tax returns were higher incomes. If you have an IRMAA because you had usually high income compared to your current tax return (and most of the tax returns in your life), you have a right to appeal IRMAA.

1 comment:


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