Updated IRMAA estimates for 2025

[TheWizard]

I guess you could "lose big" and deduct it, right?

No.
I think that gambling losses can only be deducted up to your gambling winnings for the year.
They can't offset other income.

Not sure if they carry over to subsequent years...

 

[Koolau]

Sure, but it doesn't help with IRMAA, the winnings are still counted as income.

No.
I think that gambling losses can only be deducted up to your gambling winnings for the year.
They can't offset other income.

Not sure if they carry over to subsequent years...

Yeah - against winnings - not other stuff.


Doesn't seem right if you can't subtract losses from winnings within a year. Still confused about this but it doesn't matter. I don't gamble (games of chance, that is.) Everyone gambles on something - even if it's on which car to buy. YMMV

 

[dmpi]

You have to itemize to claim the gambling loss. The standard deduction for 2023 joint return is $27,700. We have about $12,000 slot winnings this year, but we can not get above the threshold to itemize. Taxes are a bad deal for gamblers unless you have a lot of other expenses to get you to the level where you can itemize. Every December I tell my wife, bet small... no more jackpots, but it just happens anyway.

 

[Car-Guy]

You have to itemize to claim the gambling loss. The standard deduction for 2023 joint return is $27,700. We have about $12,000 slot winnings this year, but we can not get above the threshold to itemize. Taxes are a bad deal for gamblers unless you have a lot of other expenses to get you to the level where you can itemize. Every December I tell my wife, bet small... no more jackpots, but it just happens anyway.

To be technically accurate, don't you mean you have ~12k in W2G's from slot winnings this year?

 

[dmpi]

To be technically accurate, don't you mean you have ~12k in W2G's from slot winnings this year?

Yes, $12,000 total by 6 jackpots. I'm still waiting to win something real big like you. We never won anything over $10,000.

 

[Koolau]

Yes, $12,000 total by 6 jackpots. I'm still waiting to win something real big like you. We never won anything over $10,000.

I'm wondering how you even would track when you lose (you put in a dollar and lose it on a pull - how do you track that loss to eventually put against a $2000 jackpot?) Seems like the house (The IRS) always wins!

 

[Car-Guy]

I'm wondering how you even would track when you lose (you put in a dollar and lose it on a pull - how do you track that loss to eventually put against a $2000 jackpot?) Seems like the house (The IRS) always wins!

It's called a win/loss statement. Every casino issues those annually. (or more often if you like) Tracks all your wins and losses (not just w2g's for "slots wins") "if" you use your players card.

Slot machines win/loss is "spot on" and table games wins/losses, while tracked differently, are usually "pretty close", again, if you always use your players card.

 

[Koolau]

It's called a win/loss statement. Every casino issues those annually. (or more often if you like) Tracks all your wins and losses (not just w2g's for "slots wins") "if" you use your players card.

Slot machines win/loss is "spot on" and table games wins/losses, while tracked differently, are usually "pretty close", again, if you always use your players card.

Ahhhh! I get it. The Casino actually tracks it for you - if you use a "players card." Not really familiar with all this stuff, but it makes sense now.

 

[audreyh1]

I’ve been working pretty hard for the last couple of weeks to bring forward some income, yet stay within the first IRMAA tier. I’ve still got plenty of headroom left, I believe, but I have really already done everything I think is reasonable this year. All the MF distributions have paid out except for the Dec 31 dividends which I still have room for.

It’s funny how paying IRMAA really makes you sit up and pay attention! I join DH on Medicare next year, so soon it will be a double whammy.

 

[Car-Guy]

I’ve been working pretty hard for the last couple of weeks to bring forward some income, yet stay within the first IRMAA tier. I’ve still got plenty of headroom left, I believe, but I have really already done everything I think is reasonable this year. All the MF distributions have paid out except for the Dec 31 dividends which I still have room for.

It’s funny how paying IRMAA really makes you sit up and pay attention! I join DH on Medicare next year, so soon it will be a double whammy.

Especially when you realize that the "penalty/tax" associated with the first tier is really pretty small in the bigger picture. For me it's not so much the penalty but just the idea of having to pay yet another success tax.

 

[audreyh1]

Right - first tier you are paying 1.4x which really isn’t too bad. Second tier it jumps to 2x which seems far more punitive.

 

[Sunset]

We have been checking each day and updating my spreadsheet. Trying to estimate the potential for the days past Tues (last trading day for harvesting a loss).

If it was graduated by every X thousand over cost $100 , it wouldn't be so attention grabbing, but to go over by $1 is brutal.

 

[audreyh1]

Yes, it’s tough to deal with.

 

[braumeister]

It helps to look at it as payment for an extremely good healthcare plan. We all wish it were configured differently, but those who have to pay the IRMAA can obviously afford it.

 

[Midpack]

I’ve been working pretty hard for the last couple of weeks to bring forward some income, yet stay within the first IRMAA tier. I’ve still got plenty of headroom left, I believe, but I have really already done everything I think is reasonable this year. All the MF distributions have paid out except for the Dec 31 dividends which I still have room for.

It’s funny how paying IRMAA really makes you sit up and pay attention! I join DH on Medicare next year, so soon it will be a double whammy.

IRMAA has dictated my Roth conversion ceiling more than tax brackets (used to be the sole determinant) since I turned 65, and then DW 2 years later. First world problems, but still annoying...

 

[Car-Guy]

It helps to look at it as payment for an extremely good healthcare plan.

I can't disagree with that but at over 4 trillion a year you'd think it should be.

"The United States spends more on health care than any other country. Annual health expenditures stood at over 4.2 trillion U.S. dollars in 2021"

https://www.statista.com/topics/6701/health-expenditures-in-the-us/#topicOverview

We all wish it were configured differently,

Truer words were never spoken (or written)

 

[braumeister]

Dragging a thread off topic is a quick way to get it shut down.

 

[Dean56]

I'm 4 years away from Medicare, but I'm learning all I can about IRMAA.
Thanks to everyone for sharing this important info on this subject. I really appreciate it.

 

[Midpack]

I'm 4 years away from Medicare, but I'm learning all I can about IRMAA.
Thanks to everyone for sharing this important info on this subject. I really appreciate it.

+1. I was oblivious to IRMAA, NIIT and QCDs until I read about them here. Fortunately I learned in time to manage them all somewhat. I’ll have put IRMAA behind me in a few years, where I would have paid IRMAA for the rest of my life otherwise.

 

[Sunset]

IRMAA has dictated my Roth conversion ceiling more than tax brackets (used to be the sole determinant) since I turned 65, and then DW 2 years later. First world problems, but still annoying...

+1. I was oblivious to IRMAA, NIIT and QCDs until I read about them here. Fortunately I learned in time to manage them all somewhat. I’ll have put IRMAA behind me in a few years, where I would have paid IRMAA for the rest of my life otherwise.

This year we were (are?) thinking of keeping below the IRMAA line, it's tight. This morning weirdly I thought maybe we should just jump into IRMAA at the 1st level as this would allow a larger Roth Conversion.

Are you suggesting that maybe it's better to pay IRMAA at some level, to cut down on future taxable income so that it saves on taxation overall ?

 

[Midpack]

This year we were (are?) thinking of keeping below the IRMAA line, it's tight. This morning weirdly I thought maybe we should just jump into IRMAA at the 1st level as this would allow a larger Roth Conversion.

Are you suggesting that maybe it's better to pay IRMAA at some level, to cut down on future taxable income so that it saves on taxation overall ?

We’re MFJ and I was converting to the top of the 22% bracket (we had 7 figure IRAs) - that’s the primary driver, not IRMAA. Now that I’m under IRMAA, my Roth conversions are to the top of the 1.4X IRMAA bracket, which is well into but under the top of the 22% bracket. In a few years when I’ve completed the bulk of my Roth conversions I won’t pay any IRMAA penalties again (unless laws change).

 

[audreyh1]

This year we were (are?) thinking of keeping below the IRMAA line, it's tight. This morning weirdly I thought maybe we should just jump into IRMAA at the 1st level as this would allow a larger Roth Conversion.

Are you suggesting that maybe it's better to pay IRMAA at some level, to cut down on future taxable income so that it saves on taxation overall ?

We would have been below the IRMAA level for 2025, first time ever, because cap gains distributions were lower overall thanks to the 2022 bear market. Plus we had a large capital loss that would mostly have been carried forward. But I chose to go ahead and take full advantage of the large capital loss now as well as harvest some additional capital gains plus a few other things. I have been slowly selling off some legacy active MFs in favor of much more tax efficient index funds.

Why? Because we’ll probably be at IRMAA tier 1 most years in the future and occasionally pushed into tier 2. So I made moves that should reduce future taxable income hopefully making it easier to stay within tier 1. Also this is greatly simplifies things overall.

I’ve targeted much closer to the top of tier 1.

 

[Car-Guy]

We would have been below the IRMAA level for 2025, first time ever, because cap gains distributions were lower overall thanks to the 2022 bear market. Plus we had a large capital loss that would mostly have been carried forward. But I chose to go ahead and take full advantage of the large capital loss now as well as harvest some additional capital gains plus a few other things. I have been slowly selling off some legacy active MFs in favor of much more tax efficient index funds.

Why? Because we’ll probably be at IRMAA tier 1 most years in the future and occasionally pushed into tier 2. So I made moves that should reduce future taxable income hopefully making it easier to stay within tier 1. Also this is greatly simplifies things overall.

I’ve targeted much closer to the top of tier 1.

Me too, this year! I wanted to stay out of tier 1 altogether but "stuff" happens. Now I've just 4 more business days to re-calibrate. I think I'll probably just push it to within 5k of tier 2 at this point and be done with the game for this year.

 

[SevenUp]

Are you suggesting that maybe it's better to pay IRMAA at some level, to cut down on future taxable income so that it saves on taxation overall ?

"Maybe" is a good word here.

Roth Conversion with Social Security and Medicare IRMAA and Worth pushing through the Social Security hump and/or IRMAA cliffs? may provide helpful perspectives.

 

[RetMD21]

Interesting links. I am just doing the easy thing by using Roth conversions to push income up to just below an IRMAA tier change. Maybe i should make bigger conversions. You can't really optimize in the face of future unknown like the 2026 tax rates.