For IRMAA, Medicare generally uses modified adjusted gross income from your tax return. A practical way to think about it is adjusted gross income plus tax-exempt interest.
Income that can count
- Wages, pension income, interest, dividends, and taxable Social Security benefits.
- Traditional IRA and 401(k) withdrawals, including RMDs.
- Roth conversions, taxable capital gains, and taxable home sale gains.
- Tax-exempt interest, including municipal bond interest.
Common planning questions
Qualified Roth IRA withdrawals usually do not raise MAGI, while Roth conversions usually do. A properly handled QCD may reduce taxable IRA income, but the details matter.
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