The surcharge, also known as the income-related monthly adjustment amount, or IRMAA, generally applies to Medicare Part B, which provides medical insurance coverage, and to Part D, the prescription benefit.“ This essentially adds additional monthly cost responsibility to the taxpayer based on her or his income, which can be appealed if the taxpayer had a major life-changing event and income went down,” says Miklos Ringbauer, founder of MiklosCPA in the Los Angeles area.

If the client’ s modified adjusted gross income from two years ago tops a certain threshold, then the surcharge kicks in. The current year amount is based on the tax returns and income from two years before; the 2025 IRMAA is based on a client’ s 2023 return and is generally taken out of monthly Social Security benefits.

The surcharge amount also depends on what status a client uses to file taxes. For 2025, a client who files as a single or head of household and who made less than $ 106,000 in 2023 does not pay the surcharge; neither do married clients filing jointly who had a combined 2023 income of $ 212,000 or less.

The IRMAA surcharge increases incrementally for both Plan B and Plan D beneficiaries. For example, single and headof-household filers who made $ 133,000 to $ 167,000 pay $ 185 a month this year over their regular Plan B premium and an extra monthly $ 35.30 over their regular Plan D premiums. Married filers who made a combined $ 266,000 to $ 334,000 in 2023 also pay these monthly increases. Single and head-of-household filers who earned $ 500,000 or more in 2023 will pay an extra $ 443.90 a month for Plan B coverage and $ 85.80 a month over their regular Plan D premiums. For married joint filers, the threshold is $ 750,000 and up.

“ Nothing makes a client more upset than

Income-Related Monthly Adjustment Amount For Medicare Part B And Part D( 2025)

Filing As Single Married Filing Jointly Part B Part D $ 106,000 or less $ 212,000 or less $ 0.00 $ 0.00 $ 106,000 to $ 133,000 $ 212,000 to $ 265,999 $ 74.00 $ 13.70 $ 133,000 to $ 167,000 $ 266,000 to $ 333,999 $ 185.00 $ 35.30 $ 167,000 to $ 200,000 $ 334,000 to $ 399,999 $ 295.90 $ 57.00 $ 200,000 to $ 500,000 $ 400,000 to $ 749,999 $ 406.90 $ 78.60 $ 500,000 or above $ 750,000 and above $ 443.90 $ 85.80

Source: Centers for Medicard and Medicare Services when they find out their Social Security check is going to drop $ 185 per month,” says Larry Pon, a CPA in Redwood City, Calif.

Clients who want to temper the surcharges will have to manage their modified adjusted gross income as they approach or reach the Medicare eligibility age of 65. There are ways to appeal when certain life events reduce income, says Larry Seigelstein, senior wealth advisor with Prosperity( an Eisner- Amper company) in New York. Such events can reduce the IRMMA surcharges since the look-back period is two years and not one. These changes could include a marriage or divorce, the death of a spouse, or the loss of a job or a pension.

“ Tax preparers and taxpayers who regularly do planning and reviews should discuss options to either adjust withdrawals or shift income to another year to help smooth income spikes,” Ringbauer adds.

Clients must understand the composition of their annual income. Applicable increases to their adjusted gross income can include non-taxable income from U. S. territories; income they earn while an expatriate; interest from savings bonds used for qualifying education expenses; and municipal bonds’ tax-exempt interest. If they sell assets, exercise stock options or take lump-sum deferred-compensation payouts, they can also end up increasing their IRMAA surcharges.

The surcharge, however, is not increased by distributions from health savings accounts, Roth IRA distributions, reverse mortgage distributions or life insurance loans.

“ Early in the process, year one or two, people can minimize income in retirement by drawing down from savings versus taking Social Security or [ drawing ] from investment income,” Seigelstein says.“ Another consideration is converting traditional IRA money to Roth IRAs before Medicare age, around age 63, so the income doesn’ t count in the IRMAA calculation for age 65-plus. This will allow you to withdraw strategically

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