05/04/2026
The stealth tax
⏳ 📊 This is an updated version of a post I ran in January.
The IRMAA omission and the cliff-versus-phaseout distinction were the top two issues raised in the comments.
IRMAA — the Medicare premium surcharge — is a true cliff. Cross $109,000 (single) or $218,000 (joint) by one dollar in 2024 income, and your 2026 Medicare premium jumps by $1,148 per year per person.
The senior deduction and the SALT cap phase out gradually as income rises, rather than disappearing at a single threshold. The senior deduction loses 6 cents per dollar of income over $75,000 (single) or $150,000 (joint), and is gone entirely at $175,000 / $250,000.
A true cliff can cost thousands for a single dollar of extra income. A phaseout costs cents on the dollar across a defined range.
Both true cliffs in this image — IRMAA and the ACA premium tax credit — use modified adjusted gross income (MAGI), which includes tax-exempt municipal bond interest.
The Social Security taxation thresholds are a separate problem: set in 1983 and 1993, never adjusted for inflation, and catching more retirees every year.
