How to Reduce or Avoid Medicare IRMAA

Because IRMAA is based on your income from two years ago, the levers to reduce it are mostly about managing your taxable income in the years before and during Medicare. This is planning, not a guarantee. The right moves depend on your full tax picture. Work with a qualified tax advisor or financial professional before acting on any of the ideas below.

This guide walks through the most common, legitimate strategies people use to keep their MAGI under an IRMAA bracket. It is written as education, not as tax or investment advice.

Last updated: June 2026.

The Goal: Manage MAGI, Not Just Income

IRMAA does not use your gross income. It uses your Modified Adjusted Gross Income, which is your Adjusted Gross Income plus tax-exempt interest. Because IRMAA is a cliff system, the goal of planning is usually to keep your MAGI just under the next bracket threshold, not necessarily to minimize income overall. Even small adjustments near a threshold can save a meaningful amount per month for an entire year.

For background on the bracket structure and the two-year lookback, see our IRMAA income brackets guide and the IRMAA pillar.

Lever 1: Time Roth Conversions

A Roth conversion moves money from a traditional IRA or 401(k) into a Roth account and is taxable in the year you do it. It adds to MAGI and can push you into a higher IRMAA bracket two years later.

The planning logic many advisors use:

• Convert earlier rather than later. Large conversions are often most efficient in the years before the IRMAA lookback window starts, while you have more bracket room.
• Convert in smaller annual slices. Smaller conversions year after year keep you under bracket thresholds rather than pushing you over one in a single year.
• Coordinate with future RMDs. Reducing the size of your traditional IRA before Required Minimum Distributions begin can lower your MAGI in the RMD years, which is when many retirees first hit IRMAA.

This is a tax decision as much as an IRMAA decision. Talk to a qualified tax advisor before converting.

Lever 2: Time Capital Gains and Large One-Time Income Events

One-time income spikes are a common cause of IRMAA. Examples include selling a long-held stock position, exercising employer stock options, taking a pension lump sum, or cashing in a deferred compensation plan. When possible:

• Spread the event across two tax years.
• Pair a gain with realized losses (tax-loss harvesting) in the same year to reduce net MAGI.
• Be aware that selling a primary residence above the federal capital gains exclusion can push you up a bracket for one year.

The reset is automatic. Because IRMAA is recalculated each year, a one-time spike usually causes only one year of higher premiums. The surcharge resets the year after the spike rolls off your tax return.

Lever 3: Qualified Charitable Distributions (QCDs)

If you are at the age the IRS allows, you can make a Qualified Charitable Distribution, which is a direct transfer from a traditional IRA to a qualified charity. A QCD:

• Counts toward your Required Minimum Distribution.
• Is not included in your MAGI.
• Has a federally set annual limit that is updated each year.

For retirees who give regularly to charity, replacing cash gifts with QCDs can be one of the most direct ways to keep MAGI under an IRMAA bracket. Confirm current age requirements and dollar limits at IRS.gov and with your tax advisor.

Lever 4: Tax-Efficient Withdrawal Sequencing

Retirees typically pull income from a mix of accounts: taxable brokerage, traditional IRA or 401(k), Roth IRA or 401(k), HSA, and Social Security. Each has a different effect on MAGI:

• Traditional IRA and 401(k) withdrawals are fully taxable and add to MAGI.
• Qualified Roth withdrawals are not taxable and do not add to MAGI.
• HSA distributions used for qualified medical expenses are not taxable and do not add to MAGI.
• Taxable brokerage withdrawals only add to MAGI to the extent there is a realized gain.

In years when you are close to a bracket line, pulling from Roth, HSA, or the basis portion of a brokerage account can keep MAGI under the threshold. In years when you are already well below or well above the line, traditional IRA withdrawals may be more efficient. This is what advisors mean by "withdrawal sequencing."

Lever 5: Tax-Loss Harvesting

Realized losses in a taxable brokerage account can offset realized gains dollar for dollar, and a limited amount of net losses can offset ordinary income each year. The exact annual limit and carry-forward rules are set by the IRS. Tax-loss harvesting is a common, ongoing way to reduce MAGI in years when you have realized gains.

Lever 6: Filing Status and Spouse's Income

Because IRMAA uses household income on a joint return and each Medicare spouse pays the surcharge based on that household number, filing status matters. Some couples evaluate married filing separately in specific years, but the IRMAA brackets for married filing separately are much narrower and can produce a much larger surcharge. Talk to a qualified tax advisor before changing filing status.

Lever 7: Watch for the Year Around Medicare Enrollment

The year you turn 63 is often the most important year for IRMAA planning because that return sets your IRMAA the year you turn 65. If you can defer income out of that year (or pull income forward into an earlier year) without losing more in taxes than you save, you may be able to start Medicare in a lower IRMAA bracket.

If You Have Already Crossed a Bracket

If the bracket increase was caused by a qualifying life-changing event such as retirement, you may not have to wait two years for IRMAA to reset. You can file Form SSA-44 and ask Social Security to use your current, lower income. See our guide on how to appeal Medicare IRMAA.

If the bracket increase was caused by a one-time event that does not qualify (for example, a Roth conversion or a voluntary property sale), the surcharge usually resets the year after the income rolls off your tax return.

A Repeated Reminder

None of this is tax or investment advice. IRMAA planning interacts with income taxes, capital gains, retirement account rules, charitable giving, and estate planning. The right move for one household can be the wrong move for another. Always work with a qualified tax advisor or financial professional before making changes, especially before doing Roth conversions or large one-time withdrawals.

Frequently Asked Questions

Can I really reduce my Medicare IRMAA?

You may be able to reduce future IRMAA by managing your taxable income in the years before and during Medicare. This is planning, not a guarantee, and the right strategy depends on your full tax picture.

Do Roth conversions affect IRMAA?

Yes. A Roth conversion is taxable in the year you do it, so it adds to MAGI and can push you into a higher IRMAA tier two years later. Doing larger conversions earlier in life can reduce later exposure.

What is a QCD and how does it help?

A Qualified Charitable Distribution is a direct transfer from a traditional IRA to a qualified charity. It can satisfy your Required Minimum Distribution but does not count toward MAGI.

Does selling my house trigger IRMAA?

It can. The capital gain on a primary residence is excluded up to a federally set amount, but any gain above the exclusion counts toward MAGI and can push you into a higher IRMAA tier for one year.

Can tax-loss harvesting help with IRMAA?

Yes, indirectly. Realized losses in a taxable brokerage account can offset realized gains and reduce MAGI for that year.

Does my spouse's income affect my IRMAA?

Yes if you file jointly. SSA uses household income on the joint return, and each spouse on Medicare pays their own surcharge based on that joint number.

Is this tax advice?

No. This page is educational. Work with a qualified tax advisor or financial professional before making changes.

References

• Medicare.gov: Medicare costs at a glance
• SSA.gov: Medicare premiums and IRMAA
• IRS.gov: Retirement accounts, RMDs, and QCDs

We are not connected with or endorsed by the federal government or the Medicare program.

Want to talk through how IRMAA fits into your overall Medicare cost picture? I am a licensed independent agent based in Omaha. I can model how the brackets, Part D, and a Supplement or Advantage decision stack up for your situation. I am not a tax advisor, so for tax-specific moves you should also speak with a qualified tax professional. Free Medicare consultation, no pressure.

Book a free Medicare consultation with Nick Depke or call (402) 680-6171.

Written by Nick Depke, licensed independent insurance agent (NPN 19158595), Depke Insurance Agency, Omaha, NE.