IRMAA - a hidden time bomb?

I'd never heard of this, although I'm sure my accountant is aware. It seems like it should be better known.

Take a single man, 66 years old, collecting Social Security and on Medicare. $234 is witheld from his SS for Medicare. His Adjusted Income is $95,000 and he reports gambling winnings of $55,000 and losses of $58,000. The IRS considers his gambling a wash and he owes no more in tax. Two years go by and his Medicare deduction more than doubles. Medicare counts your winnings, but not your losses, so that $55,000 you "won" means your adjusted income was $150,000, not $95,000, and your medicare cost is doubled. Your 2027 Medicare deduction is based on your 2025 tax return. Next year, you'll only be able to deduct 90% of your losses and face a double whammy.
Income-Related Monthly Adjustment Amount. Is it a landmine or just more salesman's hype?

this sounds like the trap of AGI, adjusted gross income, being used to make certain determinations unfairly

In the US, if you are a gambler, everyone wants a piece of you, doesn't matter that you actually lose money doing it

yeah, i plan to sell my house at age 63 so i dont get hit by irmma at age 65 for medicare.
and yeah about agi.
seems like medicare views w2-g winnings like the irs calcs agi

Quote: 100xOdds

yeah, i plan to sell my house at age 63 so i dont get hit by irmma at age 65 for medicare.
and yeah about agi.
seems like medicare views w2-g winnings like the irs calcs agi
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You might be eligible for an exemption on the sale of your main domicile, but you would need to talk to a tax poro about that.

Quote: 100xOdds

yeah, i plan to sell my house at age 63 so i dont get hit by irmma at age 65 for medicare.
and yeah about agi.
seems like medicare views w2-g winnings like the irs calcs agi
link to original post

I read something, I don't know if it is true, but it said your medicare payment at 65 is based on your income at age 63. I don't know the details but I still hope to retire in two years at 62 so my income will be down when I am 63.

Quote: DRich

Quote: 100xOdds

yeah, i plan to sell my house at age 63 so i dont get hit by irmma at age 65 for medicare.
and yeah about agi.
seems like medicare views w2-g winnings like the irs calcs agi
link to original post

I read something, I don't know if it is true, but it said your medicare payment at 65 is based on your income at age 63. I don't know the details but I still hope to retire in two years at 62 so my income will be down when I am 63.
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Yes, 2027 premiums are based on 2025 income. If your individual income is under $95,000, you pay $234 per month, and your payments increase in brackets. That is the gist of it, but it wouldn't be Medicare if there weren't a few swerves to it. I don't know the brackets for married couples filing jointly.

I asked AI if I was paying the top rate:

Quote: AI

At $689.90 per month, you are already paying the absolute maximum tier for your Medicare Part B base premium under the Income-Related Monthly Adjustment Amount (IRMAA) for high-income earners.

Understanding Your Premium Tier Current Status: Your $689.90 rate reflects the highest bracketed surcharge for individuals with a modified adjusted gross income (MAGI) over $500,000 (or over $750,000 for married couples filing jointly) based on your tax return from two years prior. Absolute Maximum: Because you are at the top bracket, $689.90 is the highest standard Part B IRMAA tier charged.

I file as a pro gambler, so I do not report my W2-G income, just my net gambling income. For 2026, this will include some phantom income from the 90% cap on gambling deductions.

Yes. I am selling a rental house and my comic book collection this year and my medicare payments will be increased next year because of my increase in AGI ( in addition to the capital gains taxes I will be paying.)

Under normal circumstances, the trade-off seems worth it. $55,000 in extra income ends up costing about $3,000 extra for Medicare.
However, if Medicare only counts gambling winnings and not losses, you end up paying on phantom income, and that is not right.

Quote: gordonm888

Yes. I am selling a rental house and my comic book collection this year and my medicare payments will be increased next year because of my increase in AGI ( in addition to the capital gains taxes I will be paying.)
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Medicare payments would increase in 2028 if your income increases this year, not in 2027

Quote: gordonm888

Yes. I am selling a rental house and my comic book collection this year and my medicare payments will be increased next year because of my increase in AGI ( in addition to the capital gains taxes I will be paying.)
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I have over a thousand comics from my childhood, included Xmen 137, where Phoenix died (for the 1st time).

Who/how are you selling your comic book collection?

Quote: 100xOdds

Quote: gordonm888

Yes. I am selling a rental house and my comic book collection this year and my medicare payments will be increased next year because of my increase in AGI ( in addition to the capital gains taxes I will be paying.)
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I have over a thousand comics from my childhood, included Xmen 137, where Phoenix died (for the 1st time).

Who/how are you selling your comic book collection?
link to original post

I have already sold it. It was a large collection with many golden age and atomic age comics and a large number of Marvel key comics. I was very fortunate to find a collector in Texas who bought the entire collection at >80% of retail value.

There are Facebook Groups and Instagram Groups for comic book collectors. I would suggest seeking those out and posting in those groups, saying you have comic books from your childhood that you want to sell. You will be contacted by many dozens of dealers and collectors. Dealers will offer maybe 40% of retail value; collectors will offer more. You'll have to spend time sorting out all the people contacting you.

It is important that you know your collection's value, the importance of condition, etc. There are lots of resources on-line. Your X-Men 137 has a retail value of $6.00 in good condition (grade 2.0) and close to $100 in near mint condition.

billryan is probably the forum member who is the most knowledgeable about selling comic books. You might send him a PM.

Quote: gordonm888

Yes. I am selling a rental house and my comic book collection this year and my medicare payments will be increased next year because of my increase in AGI ( in addition to the capital gains taxes I will be paying.)
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Can you put the house in a trust instead and have the trust sell it instead?

winning bets increase gross income, losing bets decrease net income. Some things like this only look at adjusted gross income. American accounting has a lot of barriers, discrimination, and hoops to jump through; it also has a lot of loopholes. An llc or s corp may be able to get around this sort of discrimination.

I got caught up in the IRMMA income penalty for my 2024 tax return, so I am paying that penalty this year ( 2 year look back ). I am watching our total income very closely this year to avoid the same situation in calendar year 2028.

Google AI wrote:
How Gambling Winnings and Losses Affect Medicare
Gambling winnings and losses have separate tax and Medicare implications that can catch retirees off guard.

Tax Treatment of Gambling Winnings and Losses
Winnings are taxable income: All gambling winnings — from casinos, lotteries, sports betting, horse races, and more — must be reported on your tax return, even if you don’t receive a W‑2G form IRS. They appear as “other income” on Schedule 1 and flow into your adjusted gross income (AGI).

Losses are limited: You can deduct gambling losses only if you itemize on Schedule A and keep detailed records of both winnings and losses. The deduction is limited to the amount of gambling income you reported IRS.

Social Security and Medicare taxes: Gambling winnings are considered unearned income and are subject to Social Security tax (if applicable) and Medicare tax (3.8% on net investment income) - Facts On Taxes.

Impact on Medicare Part B Premiums (IRMAA)
Medicare uses MAGI, not taxable income: The Social Security Administration calculates the Income-Related Monthly Adjustment Amount (IRMAA) based on your modified adjusted gross income (MAGI), which includes gambling winnings. - 24/7 Wall St.+1.

Losses don’t reduce MAGI: Even if you have documented gambling losses, they are not subtracted from MAGI for IRMAA purposes. This means that if you win $55,000 and lose $58,000, the $55,000 win still increases your MAGI and can push you into a higher IRMAA bracket. - 24/7 Wall St..

Example: A retiree with $95,000 baseline MAGI who adds $55,000 in gambling winnings could face roughly $2,885 extra in 2026 Medicare premiums due to IRMAA. - 24/7 Wall St..

Starting 2026: Only 90% of gambling losses are deductible, so even if you break even on the table, you may still owe tax on the net gambling income. - 24/7 Wall St..

Key Takeaways
Winnings always count toward MAGI for Medicare purposes.

Losses only reduce taxable income, not MAGI.

Itemizing can lower your tax bill but not your Medicare premium.

Keep accurate records of all gambling activity for both tax and potential Medicare appeals.

If you’re a retiree with significant gambling activity, tracking both wins and losses carefully can help you understand your Medicare cost and plan for tax compliance.
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So if you win a $50K+ jackpot, don't spend it all in one place, or even one year.

Quote: TomG

winning bets increase gross income, losing bets decrease net income. Some things like this only look at adjusted gross income. American accounting has a lot of barriers, discrimination, and hoops to jump through; it also has a lot of loopholes. An llc or s corp may be able to get around this sort of discrimination.
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If you are not keeping session reporting, they'll just add up your W-2G's at the tax office and the Medicare office. You might want to have zero to none W-2G's. But if you are winning enough and doing session reporting with no W-2G's on the record, you add up your winning sessions to bump up your AGI and subtract out your losing sessions (or 90% of them now) to lower your taxes. You'll be stuck with a high AGI for Medicare though. Some states with casinos do this, they won't let you count the losses on their state taxes. It makes gambling untenable, especially with W-2G's on the record. The new 90% loss deduction is meant to break gamblers on their next round of taxes if they file. People are hoping it gets repealed, but I don't see it happening.

Sin taxes are as American as spaghetti and meatballs.