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HD contains numerous articles and comments about taxes, many of which talk about avoiding or minimizing those taxes. There are some like FICA that are certain. But income taxes are far more complicated and I guess you could say flexible.
I have the impression that Americans are unique in complaining about taxes, in part because they don’t see the connection between taxes and what they provide, at least not as much as many Europeans do.
The United States is not a high tax country, in the lower one third in taxation as a matter of fact.
Many people I talk with confuse the tax brackets with the taxes they actually pay. I had one friend complain about the withholding taken from a bonus, assuming the withholding percentage of 20% was the taxes he would pay.
What really matters is a person’s effective tax rate. Have you ever calculated your federal effective tax rate?
In 2024 mine was 18% which actually surprised me because it felt much higher.
Should we be complaining?
Even the IRS knows it😎
“IRMAA is not considered a tax by the IRS.
IRMAA (Income-Related Monthly Adjustment Amount) is a Medicare premium surcharge, not a federal tax. It’s treated as part of your Medicare Part B and Part D premiums.”
It’s one thing to consider federal and state income taxes, it’s quite another when you add in city taxes, property tax (on homes and vehicles), sales tax, gasoline tax, tax on phone bills, internet bills, IRMMA, and on and on.
My Federal effective tax rate is 16%, plus plus 4% state. This is not bad for a single retiree with a very large income. Of course, I’m paying IRMAA too.
IRMAA is not a tax, it’s an income based deductible health insurance premium. I think I mentioned that before so it’s no different than standard Part B premium except the 💲💲💲😎
IRMAA is a tax. The IRS doesn’t call it that, but it is a means-tested levy on income used to fund a public program, which is the functional definition of a tax. While it is labeled a “premium adjustment,” it behaves exactly like a progressive income tax.
Couldn’t you say the same about the basic Part B premium? It’s a levy on income with an identical purpose- funding health care insurance.
Everyone pays the same standard Part B premium regardless of income.Don’t they? Income only comes into play through IRMMA which is an add-on surcharge. Without IRMAA, your income does not affect the Part B base fee at all.At least, that’s my read. Think of it another way: Do you know of any other health insurance provider/adminstrator that sets your premium based in part on your income? I don’t.
Many employers do. I implemented income based premiums 25 years ago and was not the first to do.
As I said do you know of a federal tax that the IRS allows to be deducted as an expense.
If people want to call it a tax, fine, but that does not make it so.
This is one topic where I think you are spot on. If you are paying IRMAA, take a look at your SSA 1099 for 2025. You will find the IRMAA surcharges showing as part of the premiums you paid in Box 3. Therefore, like the Part B premium, if you are able to itemize deductions, and have medical expenses high enough to get over the 7.5% of AGI hurdle, you can deduct them from your taxable income.
If you pay IRMAA, 7.5% of you AGI is likely to be $20-50K.