This is the Truth Network. Um Welcome to Finishing Well, brought to you by CardinalGuide.com with certified financial planner Hans Scheil, best-selling author and financial planner, helping families finish well for over 40 years. On Finishing Well, we'll examine both biblical and practical knowledge to assist families in finishing well, including discussions on managing Social Security, Medicare, IRAID, long-term care, life insurance, investments, and taxes.
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Well, welcome to Finishing Well with certified financial planner Hans Scheil and today's show 2026 Medicare Irma tax and what to do. And so we're going to learn a whole lot today about what in the world is Irma. But but the idea of this, you you're going to find in this show there's a neat process. Again, don't try this at home, but you can certainly appeal because Irma is based on, or this particular tax is based on, what happened two years ago.
Well, the good news is, from God's point of view, he doesn't judge you. By what happened formally, especially before you came to Christ, he judges us on your current condition. Like it explains in Ezekiel 18:21 through 22. It says, If a wicked man turns from all his sins, None of the transgressions he has committed shall be remembered against him. And the idea of that is beautiful, that God.
Has got an appeal process for you, and he's outlined it in so many different ways. And there's so many stories in the Bible like that. But interestingly, in today's show, you're going to find out there: if you think you're being unfairly taxed, there is an appeal here, too. And Hans wants to help you to do it, but it's not one of those that you just want to try at home without a little help.
So. Hans, uh this Irma thing is is there's all sorts of interesting New stuff coming out in 2026?
Well, it is, and it it it is this this subject You know, our shows on YouTube, you know, we're looking at those all the time and you know, some of them have hundreds of thousands of views. Yeah, this is one of the more popular subjects. I mean, we we put out one of these and We get fifty thousand people watching the video. And I think that Medicare Irma is, first of all, people don't understand it. And so our videos are going to give you some understanding of it.
But then once they understand it. And it it's kind of like a gotcha.
So you're turning 65, you're going on Medicare. and you're learning about Medicare. And then, like, if you're turning 65, like now, you were born in 1960. or late nineteen um early 61 and so you turn to 65 And you're going to find out. that the first thing they're gonna do with Irma for you is pull your 2024 tax return.
And so it's like a cop pulling you over for speeding. He's writing you a ticket and say, you know, a hundred miles ago. And you know, and two years ago, Better than 100 miles ago. Two years ago, you were going on this stretch of road and you were traveling that. eighty five miles an hour, so we're writing you a ticket today.
Where you got to pay several hundred dollars for what you did two years ago. I mean, it's a real gotcha. Yeah. Um just we can't do anything about the way it's set up, but What I'd like to do is just give you a little information about the program. And then real quickly.
get into like what you can do about it.
So If you're a single person, Going on Medicare. You're on Medicare. Yeah. your income. In 2024, was $109,000 a year or less.
You you're not going to pay any Irma.
Okay.
So so You're not even going to get a letter about it.
Okay.
If you're married filing jointly, Your the beginning of Irma is $218,000. of income. in 2024, two years ago. And then Because up the first threshold of Irma is not Too bad, it's the extra Medicare tax. Um But has graduated steps and that the people that are up at the top of the heap income-wise.
Um you know, people that are single, that make a half a million dollars a year or more. um in income in 2024 you know they're paying an extra you know, almost 600 bucks a month. for a total of like eight hundred bucks a month. for their Medicare. And those are the people that, you know, you might look at them and say, well, they make a lot of money, it's no big deal.
I'm telling you. They get hot about this. Um And it doesn't do any good to try to tell them how well off they are. Um They just get more mad about it. And married filing jointly.
If you make you know, about the same money or you know, the highest amount is people that have over seven hundred fifty thousand dollars a year.
So it's kind of hard to feel sorry for these people. And we're not really doing that on the show. It's just. It's a tax. that Medicare assesses on you.
The government assesses on you. for having Medicare. And it's really your funding. Part or all of your Medicare through your contribution.
So if you're very well to do, you have to pay for Medicare essentially. The government's not giving you much of it for free. Um And so 2024.
Okay.
income drives the 2026 IRMA. And then once I explain that to people. They also we're going to say how much you make in 2025. And then because that's going to drive 2027 Irma. And then whatever you make in 2026, which is this year, is going to drive 2028 Irma and so on and so forth.
So Well and for those of you go ahead. I was just going to speak for it a second that I mean, correct me if I'm wrong, but you're you get Charge the Irma. And prior to going on social on on Medicare You know, you were paying insurance premiums, right? And so, even with the Irma, aren't you still better off than you would have been? Much better off.
Much better off. Um And these are the people that had their company or their group insurance. Paying their health insurance and maybe they paid something small, like a hundred or two hundred bucks a month. for three hundred bucks a month and you know Um maybe for them and their spouse. But it was a low amount relative to the cost of the insurance.
My business was paying about $1,500 a month. For me. and 1500 bucks a month for my wife. or three thousand a month. For the two of us.
for a relatively high deductible health insurance.
So And now with Irma. and the Medicare supplement. Um And the drug plan. I mean, we got much better coverage. Almost no deductibles, just a small Part B deductible.
Pian. We have a premium of about half of that. Yeah, but trying to explain that to people when they're in the middle of being mad isn't necessarily helpful to the situation.
Okay, I understand. Because everybody's not me. But. Yeah, I mean I let them we're gonna get to that What I try to do is first of all understand everything I can about this. And then I could explain it to him like, look.
you're going to have to pay. $202.90 a month. for standard Part B Medicare premium. Everybody that has Medicare pays that.
Okay, and it comes out of their social security check. And if they don't have a social security check, Yeah, 'cause they're delaying, then you've got to send them a check. And that's for part B. And then the Irma is on top of that. Yeah.
Um So it's significant. And then When people get angry, A lot of times they don't make good financial decisions. is this angers some people so much that when we're doing financial planning for them Now they want to make Irma go away, and they want to, you know, so they don't want to do anything in their financial planning. That is going to cause Irma to go up. or get added on Irma.
because they're so upset about it. And it is a good amount of money. But there's many times a recommendation like paying a year of Irma Because Not as bad. Paying Irma for the rest of your life starting at 75. at a high amount.
So I can back that up a little bit later. with the situation.
So I guess the first thing we got to do And for those of you that were just introducing you to Irma, maybe you're not at Medicare yet. and you're a high income person or you know you've been that in a job And you want to learn about, you can go to our videos, go to our website, and even look at. Not only this video, the one we just put out, but the one we put out like three months ago. And you can watch a few of them and really get a lot of information. And then the show notes.
behind there even describe it in writing. Um Very well.
So, if you really want to dig into it, the radio is not the place to get the whole education. What I want to jump to is Like, I want to talk about How do you appeal it if it's warranted? Yeah. how that works. And then I want to move on to In the second part of the show, I want to talk about Um how you plan now that we understand Irma.
Maybe we've been assessed Irma. But Now I want to map out the next thirty years. You're finan, you know, in a financial plan, and I want to. do what we can to minimize Irma But also what we mainly want to do is minimize taxes overall. Um for you and your heirs.
Make sense? Oh, absolutely. Absolutely, because you know this is The whole idea of planing, right?
Well, I did.
So let's talk about the appeal real quick.
So the the What what Irma lets you what the appeal lets you do. is say, hey, I just retired. Or I'm going to retire. in July. And so Um and I'm turning 65 in April.
So I'm going on Medicare in April, or maybe I'm not going on until July. But I'll have my group insurance till July. Regardless, When you sign up for Medicare, if you had a high income in 2024, they're going to assess IRMA. We can't appeal it till it's assessed. But once it's assessed, The appeal is this: we can say, hey, I retired.
That's a life event. Here's proof of it. PN. This is what my income is going to look like in 2026. in 2027 So now we do a projection.
And if that is under the Irma limits or lowers you in a bracket, They approve it, they remove the Irma. There you go. And that's a beautiful thing that's actually on the video as well that you talked about, that's the website under the Medicare tab. Tom kind of helps see what that looks like, what the process looks like actually in the show notes, et cetera. It's really helpful.
Yeah, so you can do it on SSA.gov now, you can go in there, search for the SSA-44 form. Irma appeal. I don't know if they call it an appeal form, but it just It's SSA-44. And you can actually complete the form. online and attach documents.
I'm gonna tell you. We make it too easy. What scares me is people are going to fill these things out wrong. I mean, it's just.
So Um There's a lot of mistakes you can make. If you want to contact us. We'll be happy to help you with this thing. and explain it and listen to your situation and tell you how to fill out the form. Because Uh there's only certain situations that they're going to approve these appeals on.
Okay.
Um Marriage Divorce. death of a spouse, work stoppage, work reduction. It needs to be one of those things. And where people get tripped up on these appeals, they think, well, I sold my house in 2024. And I made more than the or I sold a rental house, right?
had some sort of a windfall that I had to pay taxes on. And so that was a one-year blip.
So can I Um, I want to do an appeal because my income is going to be less this year, and the answer to that. Yes.
Social Security doesn't care, and the government doesn't care that you sold a house and it was a one-year blip. What they care about is: did you have a life event? In 2026. for 2025 And that life event But a lot of times on these appeals is you retire. Or your spouse retire.
Right. And the good news is, again, we got a lot of that covered at cardinalguy.com. And so if you go to cardinalguy.com, which is who brings you this show, you're going to see the seven worries tabs that we talked about. This Irma is all discussed under Medicare. And so if you go to that tab, you can find a whole host.
of videos, radio shows, and resources right along these lines. Certainly a video exactly titled the same as 2026 a Medicare Irma Tax and What to Do. And of course, you know, Hans's book, which is the complete cardinal guide to planning foreign living in retirement, and the workbook that goes with that, that also goes into great detail about Irma there in writing if you prefer to get that information that way. And of course, the easier thing to do is, you know, the way I would do it, just contact Hans or Tom. It's all there at.
uh cardinal guide.com. We'll be right back with a whole lot more on... the 2026 Medicare Irma tax and what to do. Investment advisory services offered through Brookstone Capital Management LLC, abbreviated BCM. A registered investment advisor.
BCM and Cardinal Advisors are independent of each other. Insurance products and services are not offered through BCM, but are offered and sold through individually licensed and appointed agents. Cardinal Advisors is not affiliated with or endorsed by the Social Security Administration or any other government agency.
Well welcome back to Finishing Well with Certified Financial Planner Han Scheil and today's show Is 2026 Medicare Irma tax And what to do, Hans?
Okay.
So before we do, we're going to talk the whole second part of the show is the types of recommendations. The financial planning moves and strategies to deal with Irma. That's going to be the second part of the show. But before we get to that, I want to talk about the acronym Irma. I mean, it just I could start a cartoon series around the government naming office, you know, like.
Like these. people that go back in a back room with a whiteboard and they say So Irma is Irma is income related. Monthly adjustment A mouth.
Now if you just read those five words and looked at that acronym, Would you ever come up with a Medicare tax? It doesn't no, I wouldn't. Nope, sure wouldn't it? I mean, what are these people thinking? Income-related.
Monthly Adjustment. Amount. I mean, that's it. That's Irma, I-R-M-A-A. Yeah.
It's it's comical. I mean, it's like let's let's come up with Five words and an acronym. that these people could never figure this out. from those words. And it's just I mean it's just it's Yeah.
So it's not funny when you get a cess term. I'm just trying to make light of it.
So planning considerations. What you need to think about in 2026 Yes. When 2028 rolls around they're going to look back two years at your 2026 income. and they're going to assess Irma. Based on that.
So you need to be thinking about every dollar that you count that you make in 2026, including your Social Security. Adds up. to create your Erman number. in 2028 and so on and that's just going to go on forever. As long as you're alive.
So What? You know, what do you learn from that?
Well, when we're doing financial planning, We do some things. that causes your taxes cause your taxes to increase.
So and then a lot of people will hold up a stop sign. And they'll say, Oh, I I don't want to do this Roth conversion. You know, you told me the top of the 24% bracket. You know, in a prior show. You know, I told you is for married filing jointly is over $400,000.
And so we're looking at a big Roth conversion to take advantage of low tax rates. and you're putting up a stop sign. Because in 2026 We're going to increase our taxable income. We're going to pay Irma in 2028.
Well, how much Irma are we going to pay?
So sometimes. we have to intentionally cause Irma or intentionally self-inflict some pain. Through a decision. To do a rock inversion, Knowing that we'll pay Irma for one year, two years from now. But we're doing this because we're going to save so much in taxes over a lifetime and even beyond our lifetime that it's worth it.
So there's trade-offs in everything. And what I want you to do is just understand Irma and then we can plan around it.
Okay.
Yep.
So let's talk about the RMD effect. of 73, 75, and beyond. Yes.
We we have people that we run into that have Now millions in their IRAs. Or they got 2 million, or they got 2.6 million, or 1.8 million. Yeah. These are people. that never thought they'd have a multiple millions.
But they just Started a 401k, contributed as much as they could, and the stock market's gone. extremely well in the last fifteen years, and all of a sudden here they are. And now they're retired. The end. Or maybe they're still doing some work and they're just living, or their spouse is still working.
And they're They're able to get by without taking money out of their IRA. and they're just putting it off until RMDs. And then, you know. Maybe they're mad about Irma because They're already paying a bunch of Irma. because of their high income.
when they were working. Two years ago. And so And then we go in there and we say, look, if you wait to start distributions out of your IRA. till 73 or 75, this is how much they're going to be. and you're going to be in a really big Irma bracket.
Cool. Then or in the future and you're going to stay there for the rest of your life.
So we start projecting this. Yeah. You know, I mean, it just opens people's eyes up. Am I making sense to you, Robbie?
Okay.
Yeah, absolutely. Yeah. That's why the The whole process of looking at it into the future, taking a long view. Especially, you know, as is as if one of the spouses die, then there's all sorts of things that that I'm sure you're fixing to get to.
Well, I am, because you got the widow's penalty. I mean, it's right in there.
So let's hit on the next one: Roth income. is tax-free. And so I know a popular guy on the radio who's also a financial planner. This converted all his IRA money to a rough And then he's also... Um put it in a lifetime annuity.
And he's delayed the start of it. till as late as possibly that he can. Uh and so you know, this this this this radio talker you know is is paying a lot of Irma now. Because he's got a high income. But once he retires and does an appeal, He's going to turn on this Roth annuity tax-free income and Irma's going to go away, poof.
Because all his income or most of his income is going to be coming through a rough. or Social Security. And so that number is going to be under the Irma threshold. How's that get you? Right, and it's and it's especially beautiful, right, for the for the widow in that situation as well, right?
Sure. And the the savings are compounded In life insurance. with a big cash value that was put away just like a Roth conversion or a Roth contribution. It has Roth-like characteristics. And so there's savings that's accessible.
And that's tax-free too. It's not going to show up on it. There's not going to be on an income statement anywhere. Um And It's not going to so the long term with Irma is to have tax-free income in your future and available to keep you under the IRMA thresholds. Go ahead.
Right. Um Roth conversion causes Irma for one year. I've already went over this. I've already gone over this one that, you know. is so you do a big Roth conversion in 2026, you're going to pay for it in 2028 with Irma for one year.
And so we're going to calculate that money. It's two years into the future, and we're going to add it. for one year of Irma to the tax you pay now on the Roth conversion. Because it's there. But then we're going to compare the benefits you're going to get down the road.
and do this over multiple years. Most people choose the Roth conversion and just pay the Irma. and get it out of the way while they're in their sixties.
Okay.
Yep.
Um qualified charitable distributions QCD well that's another place that when you do get to required minimum distributions. You can give part or all of your RMD to the church. Um Through a QCD that qualifies as your RMD. You don't have to pay tax on it. The church gets it tax-free.
and you get to count it as your RMDs, which doesn't drive Irma.
So this is another way with people with large IRAs and high incomes can gift And they can give. keep their taxable income lower and reduce that RMD effect or make it go away. Pretty good, huh? Absolutely. I mean, it I I've always loved Q C D's and they're just good for a whole lot of reasons.
I mean You know, obviously you're using or leveraging money to build the kingdom rather than pay tax on it. We build them right into the financial plan. I mean we just Obviously, the people need to be pro doing this. But we show them the effects of that, even for people that are in their 60s. We're going to show them.
One of you is going to reach 70 and a half. at this age. And then we're going to just go ahead and plug in this much. QCD in that year. Um and so on and so forth for the rest of your life.
We put it into the financial plan. And it has an offset to the RMD. It's wonderful.
Well, this is a good time to remind you that the show is brought to you by Cardinal Guide, CardinalGuide.com. And if you go to CardinalGuide.com, there, you're going to find the Seven Worries tabs. Today's tab would be Medicare. And so if you go to the Medicare tab, you're going to find a video with exactly the same title with all kinds of show notes. And actually, you know, Tom will show you some things on the computer and what that looks like to actually go to the government sites.
It's all there at cardinalguide.com under the Medicare tab. And then, of course, Hans's book, The Complete Cardinal Guide to Planning Foreign Living in Retirement and the workbook that goes along with that to give you a real good foundation on Irma. And, of course, the easier, just contact Hans or Tom, especially if you're going to do the appeal. I mean, I would highly recommend that you don't try that one at home. But again, great show, Hans.
You know, I love this stuff. Yeah. Well, thank you, and God bless you. The opinions expressed by Hans Scheil and guests on this show are their own and do not reflect the opinions of this radio station. All statements and opinions expressed are based upon information considered reliable, although it should not be relied upon as such.
Any statements or opinions are subject to change without notice. Investments involve risk and, unless otherwise stated, are not guaranteed. Past performance cannot be used as an indicator to determine future results. Any strategies mentioned may not be suitable for everyone. Information expressed does not take into account your specific situation or objectives and is not intended as recommendations appropriate for you.
Before acting on any information mentioned, please consult with a qualified tax or investment advisor to determine if it's suitable for your specific situation. Finishing Well is designed to provide accurate and authoritative information with regard to the subject covered. Investment advisory services offered through Brookstone Capital Management LLC, abbreviated BCM, a registered investment advisor. BCM and Cardinal Advisors are independent of each other. Insurance products and services are not offered through BCM, but are offered and sold through individually licensed and appointed agents.
Cardinal Advisors is not affiliated with or endorsed by the Social Security Administration or any other government agency.
We hope you enjoyed Finishing Well, brought to you by CardinalGuide.com. Visit CardinalGuide.com for free downloads of this show or previous shows on topics such as Social Security, Medicare, IRAs, long-term care, life insurance, investments, and taxes, as well as Han's best-selling book, The Complete Cardinal Guide to Planning for and Living in Retirement and the Workbook. Once again, for dozens of free resources, past shows, or to get Han's book, go to CardinalGuide.com. If you have a question, comment, or suggestion for future shows, click on the Finishing Well radio show on the website and send us a word. Once again, that's CardinalGuide.com.
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