Social Security and IRMAA calculation - what percent of SS benefits counts toward MAGI threshold?

It's not a simple percentage - it depends on your total income. The taxable portion of your Social Security (which is what counts toward MAGI) can be 0%, up to 50%, or up to 85% depending on your combined income. For IRMAA purposes, MAGI includes your adjusted gross income (AGI) PLUS your tax-exempt interest income PLUS the taxable portion of Social Security benefits. If you file as an individual and your combined income (AGI + tax-exempt interest + 1/2 of SS benefits) is: - Under $25,000: 0% of your SS is taxable and counts toward MAGI - Between $25,000-$34,000: up to 50% of your SS may be taxable - Over $34,000: up to 85% of your SS may be taxable The exact calculation is a bit complicated, but you'll never have more than 85% of your Social Security benefits counted.

The previous answer is good but misses a key point - for IRMAA specifically, they look at your tax return from 2 years ago. So if you're concerned about IRMAA in 2025, they'll look at your 2023 tax return. If this is your first year on Social Security (2024), then your 2023 return wouldn't have included SS benefits. And yes, the maximum is 85% of your Social Security benefits that can be taxable and count toward MAGI. Never 100%. I recommend using the IRS Publication 915 worksheet to calculate the taxable portion of your benefits. Then use the IRMAA brackets on Medicare.gov to see where you fall.

I went through this exact headache last year! The SSA and Medicare people kept sending me back and forth between offices. Nobody seemed to know the answer. I finally figured out I needed to look at the IRMAA determination letter they sent me, which showed they were using my AGI plus tax-exempt interest plus taxable SS from my tax return.

OMG this IRMAA stuff is SO COMPLICATED!!!!! I've been dealing with this for 3 years and STILL don't understand it. Last year they charged me an extra $60 per month for Medicare because I took out too much from my 401k the previous year to fix my roof. I tried to appeal it with a life-changing event form but they DENIED it saying home repairs don't count!!!! The whole system is designed to confuse seniors and take our money!!!

my tax guy said its up to 85% that counts. but what really matters is staying under the brackets. for 2024 the first bracket is $103,000 for individuals, $206,000 married. if you go $1 over you pay extra all year!

After struggling with this same issue, I discovered a tool that was actually helpful. The AARP has a tax calculator on their website that can help you estimate the taxable portion of your Social Security benefits. I've used it for the past two years and it's been pretty accurate. And just to echo what others have said - yes, the maximum that can be included in your MAGI for IRMAA calculations is 85% of your Social Security benefits, never 100%.

Has anyone else noticed that you can call Social Security 5 times about IRMAA and get 5 COMPLETELY DIFFERENT ANSWERS???? I spent TWO WEEKS trying to get someone who understood how the MAGI calculation works. Every time I called I'd wait on hold for 2+ hours only to get someone who clearly had no idea what they were talking about!!!!

To give you a concrete example of how this works: Let's say you receive $20,000 in Social Security benefits for the year. Your pension is $30,000. Unemployment is $10,000. To calculate how much of your SS is taxable: 1. Take half your SS: $10,000 2. Add that to your other income: $10,000 + $30,000 + $10,000 = $50,000 3. This is over $34,000, so up to 85% of your benefits may be taxable The actual calculation then gets complex (using worksheets in IRS Pub 915), but in this scenario, you'd likely have 85% of your SS ($17,000) included in your MAGI. So your MAGI for IRMAA would be approximately $57,000 ($30,000 pension + $10,000 unemployment + $17,000 taxable SS). Then you need to determine how much you can withdraw from your IRA before hitting the first IRMAA threshold.

Yes, that's correct based on the example numbers. With a MAGI of $57,000 before any IRA withdrawal, you could potentially withdraw up to about $46,000 before hitting the first IRMAA threshold of $103,000 for an individual. Just remember two important things: 1. These IRMAA thresholds are adjusted each year for inflation, so the exact numbers might change slightly. 2. The IRMAA determination for 2026 will be based on your 2024 income (the 2-year lookback), so the planning you're doing now is for your Medicare premiums two years from now. It's smart to stay just under the threshold if possible, as even $1 over can trigger the full surcharge amount for the year.

Just wanted to add one more resource that might help with your planning - the IRS has a Social Security Benefits Worksheet in Publication 915 that walks you through the exact calculation step by step. It's a bit tedious but gives you the precise taxable amount rather than just estimating. Also, since you mentioned you're dealing with survivor benefits specifically, be aware that survivor benefits are treated the same as regular Social Security benefits for tax purposes - so the same 0%/50%/85% rules apply. Sometimes people think survivor benefits have different tax treatment, but they don't. One strategy some people use is to spread their IRA withdrawals across multiple years to stay under the IRMAA thresholds, rather than taking a large lump sum in one year. Might be worth considering depending on your situation and timeline.

I'm new to Medicare and just turned 65 last month. This whole IRMAA thing is completely overwhelming! Reading through all these responses has been really educational though. I had no idea that they look back 2 years for income calculations - that seems like such a strange system. One question I have after reading all this: if someone has a major life change (like job loss or spouse death) that dramatically reduces their income, is there any way to get the IRMAA recalculated based on current income rather than the 2-year-old tax return? It seems unfair to penalize someone with higher Medicare premiums when their financial situation has completely changed. Also, has anyone had success working with a tax professional who specializes in Medicare planning? I'm wondering if it's worth the cost to get professional help navigating all these calculations and thresholds.

I'm a Medicare benefits coordinator and want to clarify something important that might help with your planning. When calculating MAGI for IRMAA, it's specifically the taxable portion of Social Security that counts - and as others have mentioned, this can be 0%, up to 50%, or up to 85% of your benefits depending on your total income. Since you mentioned survivor benefits specifically, I wanted to note that these are subject to the same taxation rules as regular retirement benefits. The confusion often comes from the fact that survivor benefits themselves aren't taxed differently, but your overall income situation (including unemployment, pension, and potential IRA withdrawals) will determine what percentage becomes taxable. Given your complex situation with multiple income sources, I'd strongly recommend working with a tax professional who understands Medicare planning. They can help you model different IRA withdrawal scenarios to find the sweet spot that meets your cash needs without triggering IRMAA surcharges. The cost of professional help is usually much less than accidentally crossing into a higher IRMAA bracket. Also, since you're dealing with the loss of your spouse, you may want to keep that SSA-44 form (Life-Changing Event) in mind if your income drops significantly in future years compared to what's on your tax returns.

I just want to echo what others have said about getting professional help with this. I made the mistake of trying to figure out IRMAA calculations on my own a few years ago and ended up withdrawing too much from my 401k, which pushed me into the next bracket. The extra Medicare premiums cost me way more than what a tax professional would have charged to help me plan it properly. One thing that helped me understand the Social Security taxation piece was realizing that the IRS uses what they call "provisional income" to determine how much of your SS is taxable. It's your AGI plus tax-exempt interest plus half of your Social Security benefits. Once you know that number, you can see which bracket you fall into (under $25k = 0% taxable, $25k-34k = up to 50% taxable, over $34k = up to 85% taxable). The good news is that once you understand the system, you can plan around it. I now do smaller IRA withdrawals spread across multiple years instead of taking large lump sums. It takes longer to access the money I need, but it keeps me under those IRMAA thresholds and saves me hundreds of dollars annually in Medicare surcharges.

This thread has been incredibly helpful! I'm in a similar situation - just started receiving benefits this year and trying to navigate the IRMAA maze. One thing I wanted to add that might help others: I discovered that your state's SHIP (State Health Insurance Assistance Program) counselors are often really knowledgeable about Medicare and IRMAA calculations. They provide free counseling and many of them understand the connection between Social Security taxation and IRMAA better than the actual SSA representatives. I found my local SHIP counselor through the Medicare.gov website, and she walked me through a mock calculation using my specific numbers. It was incredibly valuable and didn't cost me anything. She also helped me understand that even though the IRMAA lookback seems unfair, there are strategic moves you can make in advance - like the Roth conversion ladders some people mentioned, or timing large expenses in years when you know your income will be higher anyway. For anyone feeling overwhelmed by all this (like I was!), I'd really recommend starting with a SHIP counselor before paying for professional help. They can at least help you understand the basics so you know what questions to ask if you do decide to hire a tax professional later.

I'm dealing with a very similar situation and want to share what I learned after months of research and confusion! The key breakthrough for me was understanding that it's not just a simple percentage - the amount of your Social Security that counts toward IRMAA depends on your total income picture. Here's what I wish someone had told me from the start: 1. **The magic numbers for 2024**: If your combined income (AGI + tax-exempt interest + half your SS) is under $25k, none of your SS is taxable. Between $25k-$34k, up to 50% becomes taxable. Over $34k, up to 85% can be taxable. 2. **IRMAA timing is crucial**: They use your tax return from 2 years ago, so 2025 IRMAA is based on your 2023 return. Since you just started receiving benefits this year, your 2023 return probably didn't include SS, which means you have time to plan! 3. **The cliff effect**: IRMAA brackets are harsh - even $1 over the threshold triggers the full surcharge for the entire year. The first bracket for individuals in 2024 is $103,000 MAGI. For your IRA planning, I'd suggest calculating your expected MAGI without the withdrawal first, then see how much room you have before hitting $103k. Don't forget that as your other income increases, more of your SS becomes taxable too - it's not just additive. I ended up working with a CPA who specializes in retirement planning, and it was worth every penny to avoid those surprise Medicare surcharges!