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My wife passed away in June. Our 2024 MFJ tax return was in the first IRMAA premium tier. Our 2024 MAGI was $256K which included a $106K Roth conversion. The 2024 tax return will be the basis for my SS Part B fee including the IRMAA premium. That would put me in the 4th IRMAA premium tier for single filing. I expect SSA will initially show me in the 4th premium level. At that point, I can file an IRMAA appeal using FORM SSA-44 to request that they use my 2026 income estimate instead which will save me a lot of money. How will this be dealt with now that I will be a single taxpayer?
Medicare states that:
“If you’ve had a life-changing event that reduced your household income, you can ask to lower the additional amount you’ll pay for Medicare Part B and Part D. Life-changing events include marriage, divorce, the death of a spouse, loss of income, and an employer settlement payment.”
Life changing events do not include Roth conversions. Do I just show my estimated 2026 income, and will the SSA use that. One thing that worries me is they have a statement about perjury and I want to present things in the right way.
Welcome advice from the tax experts on the forum. Thanks.
My condolences on the passing of your spouse. I am glad you have gotten to a point where you can reach out in dealing with an expected IRMAA issue.
Mike Piper had a blog article on this topic which you and others may want to read.
My understanding is the death of your spouse in 2025 is all that is necessary for you to ask for the appropriate reconsideration to ask Medicare to use a more recent tax year return (or preliminary estimate of 2026) rather than the 2024 tax year.
I have recently watched a long video on Rob Berger’s youtube about Medicare that I found interesting. Near the end of the video starting about the 2 hour mark there was a short discussion about filing SSA-44 to appeal any Medicare IRMAA surcharges. My key takeaway that when appealing the IRMAA surcharges you should wait until you receive the letter informing you of the upcoming proposed IRMAA surcharges for the upcoming year to file the SSA-44 listing the life changing event to appeal the proposed 2026 IRMAA surcharge.
Video – https://www.youtube.com/watch?v=RlBmPB7Dexw
Given that your life changing event is the death of your spouse I would also expect you may also need to make a Medicare IRMAA reconsideration request for 2027 depending on the lookback to 2025 if your final married filing joint 2025 taxable income is such that a reconsideration request is needed to appeal a 2027 Medicare surcharge.
You may want to see what actions you can take in 2025 and 2026 to keep your 2026 taxable income at a level to minimize any 2026 and 2027 IRMAA surcharge.
I hope my thoughts help.
Best,
Bill
Thanks Bill. I appreciate your response.
Piper states, “if your income declines significantly from one year to the next due to a “life changing event” you may request that your premiums be based on that more recent year’s level of income, rather than your income from two years ago. This request may be referred to as a “request for reconsideration”.
Most of my decline in income is due to the Roth conversion, not the death of my wife. I want to make sure I do not perjure myself in doing this request.
Also, prior to my wife’s death, I was planning to do another Roth conversion in 2025. Can I do that and get use my MAGI estimate for 2027? This will be my last opportunity to do a Roth conversion MFJ.
Jerry
Good morning Jerry,
I understand and agree that you want to make sure you do not perjure yourself in making this request.
Part 3 of the SSA-44 – Anticipated Reductions in Modified Adjusted Gross Income Next Year seems to be key to me to getting potential 2026 IRMAA relief for a premium surcharge based on your 2024 income.
My take – Your 2024 MFJ income upon which any 2026 IRMAA surcharge is automatically initially determined can be modified when you have certain qualifying life changing events. Your wife’s death in June 2025 is a listed life changing event. Thus the provision allows you to request, via SSA-44, for the determination for 2026 IRMAA surcharge to be based on a “future” year i.e. 2025 instead of 2024.
As apparently a 2025 Roth conversion was not made prior to the June DOD of your wife I would also not want to base a SSA-44 life changing event request using anticipated 2026 tax year income for 2027 IRMAA surcharge purposes. My thinking might be different if the 2025 Roth conversion had occurred in 2025 prior to her death.
I would think you would want to consider foregoing your previously planned 2025 Roth conversion. I also would work hard to estimate your actual 2025 income and send that work (such as a draft of your 2025 MFJ return, marked as preliminary on each page of the draft) as a supporting document to attach to the SSA-44. I would expect the SSA to verify your estimated 2025 income with the actual MFJ filing status 2025 return when that return is actually filed in 2026.
Between now and the end of 2025 you may be able to make decisions to help minimize your 2025 taxable income and for 2025 you now have potential IRMAA surcharges (for 2026 and 2027) to consider in addition to your regular year end tax planning considerations.
Compliance note – If your wife was of a age in 2025 that if she owned any traditional IRA that had a 2025 un-taken required minimum distribution (RMD), then that RMD needs to be taken timely in 2025 to avoid a tax penalty and also before you consider any rollover (as you also cannot rollover a inherited RMD).
If you are the primary beneficiary of IRA’s owned by your wife and those IRA name contingent beneficiaries, like adult children, and you do not need or want those IRAs and prefer the contingent beneficiaries to inherit them, then typically you have a short window of time to legally disclaim inheriting and then the IRA’s would typically go to and be taxed to the contingent beneficiaries. If disclaiming, the contingent beneficiary(s) would likely need to take the any undistributed 2025 RMD.
Knowing about your wife’s death my typical last interview question if I were your tax preparer and you were sitting across the table from me would be “have you updated all of your retirement and life insurance beneficiary designations to the person(s) you intend in the event of your death?”. Additionally, I own Mike Piper’s 2022 book, After the Death of Your Spouse, and recommend it to anyone who is a surviving spouse and I think you could benefit from the guidance Mr. Piper offers in the book.
Best, Bill
Thanks again Bill. I will order Piper’s book right away. I have changed all accounts, banks/investments/etc, to single with children as beneficiaries. I have not changed our will because they are listed as contingent beneficiaries. However, I do intend to review the will with an estate attorney and make changes if he advises me to do so.
I have already done the RMD for my wife’s IRA account.
What would be the consequence if I went ahead and did another Roth conversion? I had planned to stay within the first IRMAA tier which has no surcharge.
Just curious. What is your tax background? Were you a CPA or tax adviser?
Regards,
Jerry
My ideal math decision to go ahead or not with another 2025 Roth conversion would be based on the expected long run lowest federal and state tax cost and projected differences in projected Medicare surcharges, ideally discounted at an appropriate time value of money.
Lots of assumptions in the forgoing math and at 75 I have making been making more of my decisions using first what is best for my four year younger disabled wife and then what is best for our adult children and their children. If my wife dies before me then I would expect my future financial decisions will be driven by what is best for our adult children.
Apparently, similar to your decisions, most of our financial assets will pass via ownership on how the assets are titled or by beneficiary designation.
My relevant work background is after two years, 72-74, of service in the US Army as an enlisted man I returned to college and got a degree in accounting in 1977. In 1980 I passed the CPA exam and I worked mostly in public accounting, largely in the tax area, full time until 2022. I have continued to keep my CPA certificate current post 2022 and I worked part time seasonally until early 2025, I have recently become a full time caregiver for my wife.
Thanks again Bill. You are obviously very well qualified as a tax expert. I appreciate your advice.
I have been told by others (expertise unknown) that I could use my expected 2027 income for IRMAA instead of 2025 MFJ by doing the SSA 44A form again. Do you think that is likely? That is a major factor in the decision.
Sorry to hear about your wife, but she is in good hands with you as her caregiver.
Good morning Jerry,
Thank you for your kind words.
My view – Accountant’s work and preparing tax returns is mostly driven by past financial history and often then using that history to help predict the future outcomes from current decisions.
You in your early 80’s and me in my mid 70’s are currently making financial decisions that the primary beneficiaries of our decisions will likely be our loved ones and not us.
So the future uncertainty associated with what factors Medicare will use to decide to allow or not allow a substitution of a different year in setting your future Medicare premium surcharges seems to be key to such decisions.
By keeping your current income lower by not converting large amounts of traditional IRA to Roth then your adult children would then inherit taxable assets instead of tax free assets but under existing law they would have 10 years after your death to make such taxable distributions while you by making conversions will likely be choosing higher current taxes sooner and potential higher future Medicare premium surcharges because of the income from taxable conversions if IRMAA rules apply.
Under existing tax rules, you also have the ability to make qualified charitable distributions from future required minimum distributions which are excluded from your taxable income for any such charitable contributions that you already have the intent to make while meeting your RMD requirements.
As a single tax filer for tax years after 2025 your available tax brackets will be approximately one half of what they have been previously as married filing jointly. That change in brackets after 2025 would favor making conversions to a Roth in 2025 better than after 2025.
Not knowing the unknowable future with certainty makes these decisions difficult and I would compare this decision to the decision of what percentage of foreign stocks to total stocks to hold in your portfolio as described by Adam Grossman in his HD posts. His thinking to split the difference on that topic and my thinking on the amount of Roth conversions would be similar. I would encourage you to use middle of the road planning to guide your decisions on this topic.
I wish I could offer a definitive answer. I hope this helps.
Best, Bill