Medicare is already reading your 2026 tax return

Every December, retirees make the same smart moves. Convert some IRA money to a Roth. Sell a winner. Take the last required distribution. Write a few checks to charity.

Here's what almost nobody tells you: Every one of those moves comes with a second bill. It just doesn't show up for two years.

That bill is IRMAA. The income you report for 2026 sets it for 2028. The year you're finishing right now is the one Medicare will read.

Let me walk you through how to keep that bill from catching you off guard.

The two-year mirror

IRMAA, the Income-Related Monthly Adjustment Amount, is the surcharge Medicare adds to your Part B and Part D premiums once your income crosses a line. Social Security sets it using your tax return from two years earlier. Your 2026 premium is based on your 2024 return. Your 2028 premium will come from your 2026 return.

In 2026, the first line is $109,000 for a single filer and $218,000 for a couple. Stay under it, and you pay the standard Part B premium of $202.90 a month. Go over, and it jumps to $284.10. Keep climbing, and you can end up near $690 a month. The 2028 lines will be adjusted for inflation, so planning to today's numbers gives you a little cushion.

Two things make this painful. It's a cliff: One dollar over, and you pay the full surcharge for that tier all year. And it's per person: If you're married and both on Medicare, you both pay it.

So the December question isn't just "What's my tax bracket?" It's "How close am I to the line?"

The Roth conversion that costs more than you think

Consider a married couple, both 67. Between pensions, Social Security and a required distribution, they're on track for $175,000 of income in 2026. They want to convert $50,000 to a Roth.

If they convert $40,000, they finish the year at $215,000. Under the line. No surcharge.

Convert $50,000, and they finish at $225,000, which is $7,000 over. In 2028, each of them pays an extra $81.20 a month for Part B. That's about $1,950 for the year, on top of the income tax, for that last $10,000 of conversion. Call it an extra 19.5% tax that nobody mentioned.

The fix is simple. Size your conversion to whichever line comes first: the tax bracket or the IRMAA threshold. Stop a few thousand dollars short to leave room for surprises. And if you're going over anyway, consider going all the way up to the next line, because the surcharge is the same anywhere inside a tier.

Give from your IRA, not your checkbook

If you're 70½ or older and give to charity, how you give matters. A qualified charitable distribution, or QCD, sends money straight from your IRA to the charity. It never shows up in your income, and once you start taking required distributions, it can count toward them.

Write a check and deduct it instead, and you get a tax break but not an IRMAA break. IRMAA is based on your income before deductions. The $20,000 you took out of your IRA still counts, even if you gave $20,000 away. The same goes for donor-advised funds.

QCDs must be made by Dec. 31, and IRA custodians get slammed this time of year. Don't wait.

Watch the income you didn't plan for

Conversions get the attention, but plenty of other income lands on the same line.

• Mutual fund payouts. Funds in taxable accounts often pay capital gains distributions in December, and they can be bigger than you expect.
• Capital gains. Selling a stock or property can push you over. Sometimes waiting until January is the whole fix.
• Municipal bond interest. It's tax-free, but Medicare counts it anyway.

Know where you'll finish the year before you add that last dollar.

Just retired? You might be overpaying right now

The two-year lookback hits hardest early in retirement. If you stopped working in 2025, your 2026 premium was probably set by 2024, a full-paycheck year.

You can ask Social Security to use your current income instead. File Form SSA-44 and show a life-changing event, such as stopping work, cutting your hours, marriage, divorce, the death of a spouse or losing a pension. If your income really dropped, your premium can drop too.

The bill you can still control

Picture two retirees who make the same moves this December. One looks only at tax brackets. The other also checks the IRMAA line. Two years from now, one of them gets a smaller Social Security deposit and has no idea why.

So before Dec. 31, widen the lens:

• Find your number. Add up everything, including required distributions, pensions, the taxable part of Social Security, gains, fund payouts and even muni interest. Then see how close you are to the next threshold.
• Fit your moves to it. Size the conversion, route the gift through a QCD, and time the sale.

Your 2028 Medicare bill is being written right now. December is the last month you get to edit it.

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Mark Annese is the co-founder of IRMAA Certified Planner and cofounder of RetirementAdvisorPro, Contact him at mark.annese@innfeedback.com.