Should I Be Filing Separately for IRMAA?
- The way you file your taxes can have a big impact on how much you pay for your Medicare coverage. Learn about filing separately vs. jointly as it relates to Medicare IRMAA.
Who doesn’t want to save money on their Medicare insurance? Beneficiaries are often careful to avoid out-of-network charges, take the time to shop around for more affordable plans every year and take other measures designed to keep more money in their own pockets.
So why not file your taxes differently too?
If you earn a higher income, you may be familiar with the Income-Related Monthly Adjusted Amount, or IRMAA. If you’re not up to speed, IRMAA is a surcharge for Medicare Part B and Part D premiums that is applied to beneficiaries who earn an income above a certain threshold.
But there’s one small caveat about IRMAA. The amount of IRMAA tax that you pay for your Medicare premiums can be lowered simply by filing your taxes differently.
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How Is IRMAA Determined?
IRMAA charges are determined by using the modified adjusted gross income (MAGI) reported on your taxes from two years prior.
If your 2022 reported MAGI is above a certain limit, you pay extra for your Medicare Part B and/or Part D premiums in 2024. And the more you earn, the more you’ll pay. If your income is at or below the limit, you pay only the standard amount and nothing extra.
The charts below show how much IRMAA tax you may be responsible for given your reported income.
IRMAA Brackets for 2024
| 2022 Individual tax return | 2022 Joint tax return | 2022 Married and separate tax return | 2024 Part B monthly premium |
|---|---|---|---|
| $103,000 or less | $206,000 or less | $103,000 or less | $174.70 |
| More than $103,000 and up to $129,000 | More than $206,000 and up to $258,000 | N/A | $244.60 |
| Above $129,000 to $161,000 | Above $258,000 to $322,000 | N/A | $349.40 |
| More than $161,000 up to $193,000 | More than $322,000 up to $386,000 | N/A | $454.20 |
| More than $193,000 up to less than $500,000 | More than $386,000 up to less than $750,000 | More than $103,000 up to less than $397,000 | $559.00 |
| More than or equal to $500,000 | More than or equal to $750,000 | More than or equal to $397,000 | $594.00 |
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| 2022 Individual tax return | 2022 Joint tax return | 2022 Married and separate tax return | 2024 Part D monthly premium |
|---|---|---|---|
| $103,000 or less | $206,000 or less | $103,000 or less |
Your plan premium |
| More than $103,000 and up to $129,000 | More than $206,000 and up to $258,000 | N/A |
$12.90 + your plan premium |
| More than $129,000 up to $161,000 | More than $258,000 up to $322,000 | N/A |
$33.30 + your plan premium |
| More than $161,000 up to $193,000 | More than $322,000 up to $386,000 | N/A |
$53.80 + your plan premium |
| More than $193,000 up to less than $500,000 | More than $386,000 up to less than $750,000 | More than $103,000 up to less than $397,000 |
$74.20 + your plan premium |
| More than or equal to $500,000 | More than or equal to $750,000 | More than or equal to $397,000 |
$81.00 + your plan premium |
Is it Better to File Separately?
What do you notice when looking at the charts above? For beneficiaries of particular income brackets, filing your taxes jointly can save you bundles on your Medicare premiums when compared to filing married but separate.
For example, let’s say your 2022 reported income was $104,000. If you filed jointly, you’ll be paying the standard Part B premium of $174.70 per month in 2024 and no additional tax on top of any Part D premiums.
But if you filed that $104,000 as married but separate, you’d be paying $559 each month for Part B and a $74.20 per month tax on top of any Part D premiums.
That’s an enormous difference in your Medicare premiums. If you had both Part B and Part D, the savings would amount to more than $5,000 per year for each person, or more than $10,000 per year as a household if both spouses have both Part B and Part D in 2024.
Of course, filing jointly won’t help in every scenario. If your 2022 MAGI was over $750,000, your 2024 Part B and Part D IRMAA costs would be from the highest bracket whether you filed married but separate or jointly in 2022.
There is typically not a scenario in which filing jointly will cause you to pay more IRMAA versus filing separately.
In other words, filing jointly will typically either lower your IRMAA or keep it the same. It won't usually cause you to pay more. Filing separately will either raise your IRMAA or keep it the same in most cases. It won't typically cause you to pay less for Part B or Part D.
To be clear, there are numerous other pros and cons of filing your taxes jointly vs. separate that you should consider.
To determine if you would benefit more by filing jointly, simply consult the charts above to find your income level and check the corresponding IRMAA amounts for both joint and married but separate filings.
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Does IRMAA Apply to Both Spouses?
IRMAA applies to both spouses when both are on Medicare. Medicare premiums are charged to each individual beneficiary as there is no “family plan.”
Should Two High-Income Earners File Separately?
If your 2022 MAGI is at least $750,000, it makes no difference how you filed for the purpose of IRMAA, as your increased premium amounts will be the same either way.
But when two high-income earners combine to make less than $750,000, it may be advantageous to file jointly.
For example, if your combined 2022 MAGI was $600,000, a joint file would require a 2024 Part B payment of $559 per month and an additional $74.20 for Part D in 2024.
Meanwhile, a married but separate file in 2022 would require $594 per month for Part B in 2024 and an extra $81 for Part D.
Again, filing separately may not cost you more in every situation, but it typically won't save you money on your Medicare IRMAA.
Is it Better to File Separately if One Spouse is on Social Security?
Social Security status for the purpose of IRMAA makes no difference. IRMAA is based off income and tax filing status.
Any income received through Social Security will count toward one’s IRMAA status.
Does Social Security Automatically Adjust IRMAA?
Any applicable IRMAA tax will be automatically added to your Medicare Part A or Part D premium.
IRMAA amounts typically increase each year, and any increase will also be automatically adjusted to your bill.
How Else Can I Save Money on Medicare?
There are some additional ways you can save money on your Medicare coverage. A Medicare Supplement Insurance (Medigap) plan can provide coverage for Medicare deductibles, copayments and coinsurance.
Have Medicare questions?
Talk to a licensed agent today to find a plan that fits your needs.
