2022 Tax Tip to Avoid the Medicare Premium Surcharge

2022 Tax Tip for Seniors On Medicare: Watching to avoid your Medicare Premium Surcharge number before submitting your 2022 taxes can save a single tax filer about $1,420 a year.

Fast Facts: In 2021, 4.7 million Americans paid $10.1 Billion in additional IRMAA Medicare premiums (1). Some 3.1 million of those impacted by the surcharge are between ages 65 and 84.

A small amount of part-time income (say $200) can push anyone into the next higher surcharge bracket. When that happens, a couple filing jointly who are both Medicare beneficiaries, will end up paying $2,840 more annually.

Your Medicare Premium Surcharge is the amount added to what higher income Medicare beneficiaries pay Uncle Sam monthly for their Medicare Part B and Part D (prescription drug plan) coverage. If your 2022 tax filing indicates income above set minimum thresholds, you’ll pay more in 2024.

For 2023, the Medicare Premium Surcharge, based on 2021 tax filings, can be as much as $395.60-per-month for Medicare Part B. A surcharge is also imposed on those with Part D drug plan coverage.

Before Filing Your 2022 Federal Taxes

Your 2022 Federal tax filing (due April 18, 2023) will be used to determine your surcharge bracket for 2024. While the final bracket threshold amounts have not yet been set, the American Association for Medicare Supplement Insurance suggests the following easy way to prevent paying more.

Step 1: Check the Adjusted Gross Income (AGI) number prior to filing 2022 taxes. For tax year 2022, your AGI is on Line 11 on Form 1040, 1040-SR, and 1040-NR. It is located on different lines on forms from earlier years.

Step 2: Compare to see if your AGI is close to one of the numbers shown here (in red). This is the 2023 threshold amount(s) increased by 6 percent. Rates are increased based on the rate of inflation (our guesstimate).

Adjusted Gross Income for Single Tax Filers:
$103,000
$130,500
$162,000
$194,000
$530,000

Adjusted Gross Income for Couples Filing Jointly:
$206,000
$261,000
$324,500
$388,000
$795,000

Step 3: If your AGI is close to one of the amounts shown above (single if you file as a single, etc.), it’s worth talking to your CPA or tax-preparation professional prior to authorizing submission of your taxes. Especially if you are close to the amounts shown.

Step 4: You actually will need to know your MAGI (not your AGI). But since MAGI doesn’t appear on your tax filing, we show AGI numbers (which do appear).

Your Modified Adjusted Gross Income (MAGI) is Adjusted Gross Income (AGI) plus these, if any: untaxed foreign income, non-taxable Social Security benefits, and tax-exempt interest. For many people, MAGI is typically identical or very close to adjusted gross income. Your tax preparer can easily calculate. And the tax software packages say they have a way to calculate.

2022 Tax Tip: Can You Still Contribute to an IRA?

Most actions that will impact your 2022 taxes must be completed prior to year-end (December 31, 2022).

However, if you have job-related income (and many seniors do) you may still be able to contribute to an IRA account.

That $300 in contribution (made before April 15, 2023) could save you close to $3,000. That’s why it’s worth taking the time to look.

Learn More About IRMAA for Medicare

The American Association for Medicare Supplement Insurance does NOT give tax or financial advice.

We provide this information because it’s our goal to provide relevant and helpful information. Always seek professional guidance regarding these matters.

Read more about income-related monthly adjustment amount (IRMAA for Medicare) by clicking the link shown.

(1) Centers for Medicare & Medicaid Services. CMS program statistics, Medicare Premiums Calendar Year 2021.

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