The $1.00 Difference: How IRMAA Can Lead to Costly Surprises
Medicare’s Income-Related Monthly Adjustment Amount (IRMAA) is essentially a surcharge—or tax—on your income. It applies when your income exceeds certain thresholds, raising both your Medicare Part B and Part D premiums. Even just $1.00 over the limit can lead to higher costs that many people, including their CPAs, often overlook.
IRMAA: A Surcharge on Income
IRMAA is based on your Modified Adjusted Gross Income (MAGI) from two years prior, using figures from your tax return. For 2024, it’s based on your 2022 income. If your income crosses the threshold—$103,000 for individuals and $206,000 for couples—IRMAA is applied on top of your standard Medicare premiums.
The more income you report, the higher your premiums become. In fact, the Part B Premium increased to $244.60 - $594.00 for the Individual. There is also an additional surcharge of $12.90 - $81.00 for the Part D.
This means higher earners pay significantly more, which the system is designed to accomplish as a way to distribute costs more equally among Medicare beneficiaries.
Does it really distribute costs more equally?
How does $1.00 trigger an additional $993.60 in Medicare Premiums in 2024?
Earning just $1.00 too much reduces income by almost $1,000!
The Real Cost of $1.00
Let’s take Jim as an example. Jim’s income for 2022 was $103,001—just $1 over the threshold. Instead of paying the standard Part B premium, $174.70 a month or $2,096.40 for the year, he ends up paying $3,090.
Now Jim pays additional surcharges for Part B and Part D. An additional $69.90 per month for Part B and an additional $12.90 for his Part D. A difference of $993.60 for just a $1.00 difference in his modified adjusted gross income.
Why This Matters
Many people are blindsided by IRMAA. It’s often overlooked by tax preparers, CPAs, and even financial advisors who don’t specialize in Retirement Income planning. This surcharge can add up quickly, reducing Social Security benefits and creating unnecessary financial stress.
Proper planning—whether it’s timing Roth conversions, managing capital gains, or structuring 401(k) withdrawals—can help you stay within the IRMAA thresholds and avoid these costly penalties. Without careful tax planning, even a single dollar could lead to a hefty surcharge that sticks with you for the entire year.

Source: https://www.medicare.gov/drug-coverage-part-d/costs-for-medicare-drug-coverage/monthly-premium-for-drug-plans