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The “how to avoid irmaa” is a question that has been asked many times. IRMAA stands for Internal Revenue Manual of Accounts Audit Assistance, and it is the most commonly used manual in the United States. The IRS requires all businesses to use this manual when filing their taxes. There are some steps you can take to avoid having your company audited by the IRS.
Clients and others who read our site often ask us about the IRMAA. Here are some of the most often asked IRMAA inquiries from readers and customers.
We’ll be updating this page as new questions come in. Please leave a comment below with your question, and we’ll try our best to respond!
1. What exactly is IRMAA?
The income-related medical adjustment amount is also known as IRMAA. It’s essentially a Social Security Administration tax on Medicare premiums for higher-income enrollees.
2. IRMAA affects which elements of my Medicare premium?
IRMAA applies to Medicare Parts B & D.
3. Do I need to be concerned about IRMAA before starting Medicare?
No, the IRMAA exclusively affects Medicare recipients.
4. Do I have to pay the Part D IRMAA if I don’t have Medicare Part D?
No. According to a December 10, 2010 Centers for Medicare & Medicaid Services (CMS) memorandum, if an individual does not have a Medicare prescription drug plan, that person should not be charged Part D IRMAA.
However, if that individual disenrolled (voluntarily or unwillingly) and has an outstanding debt with unpaid Part-D IRMAA, that person may be liable for the past due sum.
5. Who determines my IRMAA, and how are they determined?
This is decided by the Social Security Administration (SSA). The SSA determines these findings based on IRS data, according to the SSA Program Operations Manual System (POMS) HI 01101.035-Initial IRMAA Determination Notices (from your individual tax returns).
6. How can I make a payment to IRMAA?
IRMAA payments are handled in one of two ways by the SSA:
- If the amount of your Social Security payment is sufficient to satisfy your IRMAA expenses, the SSA will deduct the IRMAA from your Social Security checks automatically.
- If you are not yet taking Social Security, or the IRMAA charges exceed the amount of your check, then you will receive a bill for the unpaid IRMAA balance. This bill will come from either the Centers for Medicare & Medicaid Services or the Railroad Retirement Board, whichever applies to you.
7. Do I have to pay IRMAA if I don’t get Social Security?
If you are a Medicare member who is liable to IRMAA because of your income, you must pay it even if you are not receiving Social Security.
8. What will the IRMAA be in 2022?
Most taxpayers’ 2022 IRMAA fees will be determined using their 2020 MAGI (adjusted gross income plus municipal bond income). The following are the IRMAA surcharges for 2022:
IRMAA for Medicare Part B in 2022
According to the Centers of Medicare and Medicaid Services, below is the IRMAA for Medicare Part B in 2022 schedule.
$170.10 per month is the standard premium.
IRMAA for Medicare Part B in 2022
IRMAA for Medicare Part D in 2022
The Part D IRMAA schedule for 2022 is shown below, according to the Medicare website.
IRMAA for Medicare Part D in 2022
9. What options do I have if I disagree with my IRMAA decision?
You may disagree with the IRMAA decision for a variety of reasons. In the case of two of them, the SSA gives explicit online instructions.
IRMAA judgment based on inaccurate IRS tax information.
This might be due to an IRS mistake or an updated tax return for the year considered for the IRMAA decision. In any situation, the beneficiary must give verification by one of the following methods:
- A corrected tax return
- A letter from the IRS documenting the factual data the IRS actually received & the erroneous information that the IRS provided to the SSA
- A copy of the submitted tax return for the tax year in which the mistake occurred, as well as a transcript from the IRS containing additional information.
Refer to POMS HI 01120.050-Use of Corrected IRS Tax Data or contact the SSA office for further information on utilizing corrected or updated tax information to compute IRMAA.
Your income has been impacted (or is projected to be impacted) by a recent life event.
The SSA has identified eight life-changing events that may help decrease or eliminate IRMAA:
- a spouse’s death
- annulment or divorce
- Reduced workload
- Workplace disruption
- Property that generates money is lost.
- Loss of a company pension
- Payment from a current or previous employer in the form of a settlement
You may be eligible to seek a reconsideration of your IRMAA based on one or more of those circumstances if they happened. To do so, you’ll need to complete Form SSA-44, Medicare Income-Related Monthly Adjustment Amount-Life Changing Event, and submit the required paperwork.
This is not a petition. It’s a request that the Social Security Administration make a fresh decision based on facts that they couldn’t have guessed from your tax return.
If none of these options is successful, you may always file a complaint with the Office of Medicare Hearings and Appeals. You must have sought a review of the IRMAA decision prior to filing your appeal.
For further information, call the Social Security Administration (SSA) or visit the OMHA Medicare Part B Premium Appeals page.
10. What is SSA-44 and what effect does it have on my IRMAA?
As previously stated, you may utilize the SSA-44 form to obtain a fresh determination based on life circumstances that have affected your finances.
We’ve developed a step-by-step tutorial to lead you through the SSA-44 to assist you.
11. After receiving my IRMAA decision letter, I retired. Can I request a modification in my IRMAA from Social Security?
The SSA would consider retirement as one of the eight life-changing events when making a fresh IRMAA assessment. You would accomplish this by following the directions on the SSA-44 (see above).
12. Can I escape IRMAA with Roth conversions?
Roth conversions may assist you decrease or avoid IRMAA when used as part of a strategic Roth conversion strategy to lower required minimum distributions (RMDs).
Each taxpayer’s position, however, is unique. Not only IRA distributions, but a variety of other things may affect your taxable income.
Some (but not all) of these criteria might include:
- How much money do you get from municipal bonds? (Line 2a on your Form 1040)
- Whether or whether you get a pension
- Additional sources of income (part-time job, spousal income, etc).
- Charitable donations: Charitable contributions, particularly eligible charitable distributions, may assist reduce your taxable income (QCDs). QCDs are direct charitable distributions from your IRA to a qualified charity of your choosing. QCDs may be used to offset your RMD while remaining tax-free.
- Capital gains—There are two sorts of capital gains to think about.
- Stocks or mutual funds with a low basis and substantial capital gains that you’ve collected over the years, either via an employment, a family bequest, or on your own.
- Capital gains distributions—This might be in high-turnover mutual funds. Even if you do not sell the mutual fund, the mutual fund management may make distributions at the end of the year depending on the mutual fund’s capital gains.
Talk to your tax expert or financial adviser about how Roth conversions might help you decrease or eliminate IRMAA.
13. It seems that the SSA calculated my IRMAA using data from three years ago, despite the fact that I have a more current tax return on file. What options do I have?
This looks to be a rather typical occurrence. In reality, it’s customary for the SSA process handbook to include a section on what to do:
When SSA used 3 year old tax data to determine the IRMAA, HI 01120.055 Beneficiary provides 2 year old tax data.
To conclude, this is the procedure for the SSA office to validate the taxpayer’s most recent return and re-run the IRMAA computation using that information.
For example, despite the fact that she and her spouse had filed a 2019 tax return, a customer recently inquired about her 2021 IRMAA, which was computed using 2018 tax return information.
Because this is not a life-changing occurrence, an SSA-44 should not be required. This is an entirely separate procedural issue that necessitates a different resolution procedure.
Update: A customer recently had this interaction with the SSA about this topic. Something in the SSA’s system seems to be automatically producing a large number of these notifications, which the agency is working to correct.
In the meanwhile, two separate SSA personnel informed her that the best way to handle this is to:
- Notify the Social Security Administration.
- Fill out the SSA-44 form again. If possible, address the form to the person or department with whom you had the conversation.
Your results may vary. This article will be updated as needed.
Please contact us if you have an IRMAA question that we have not addressed.
The “IRMAA Frequently Asked Questions” is a list of questions that users might have about the IRS. It includes topics such as what income is irmaa based on, how to use irmaa and the difference between irmaa and irs.
- is irmaa calculated every year
- form ssa-44 for 2022
- is retirement a life-changing event for irmaa
- irmaa refund
- is irmaa appeal retroactive