IRMAA (Medicare Income-Related Adjustment)
Higher Medicare premiums for higher-income beneficiaries.
What is IRMAA (Medicare Income-Related Adjustment)?
Income-related monthly adjustment amounts are surcharges on Medicare Part B and Part D premiums, based on modified adjusted gross income from two years earlier. Large one-time income - a Roth conversion, a big capital gain - can raise premiums two years later, which is a government-benefit consideration in tax planning.
IRMAA (Medicare Income-Related Adjustment): a worked example
A $150,000 Roth conversion at 64 can raise the client's Medicare premiums at 66.
More terms in Clients, Strategy & Tax
Sole Proprietorship
A business owned by one person with no legal separation from the owner.
General Partnership
Co-owners share management and unlimited liability; income passes through.
Limited Liability Company (LLC)
Limited liability for owners with pass-through taxation by default.
C Corporation
A separate taxpayer - profits taxed at the corporate level, then again as dividends.
S Corporation
A corporation that passes income through to shareholders, avoiding double tax.
Trust & Estate Accounts
Accounts run by a fiduciary - a trustee or an executor - under a governing document.
Foundations & Charities
Tax-exempt organizations investing for a mission, often in perpetuity.
Client Profile & Data Gathering
The financial and nonfinancial facts every recommendation must rest on.