From 24/7 Wall St. · Gerelyn Terzo · · 1m 20s
Medicare Surcharge Hidden in Home Sale
Retired couple's home sale and final salary stack on one tax return, triggering Medicare surcharge until SSA-44 fixes it.
In brief
Retired couple's home sale and final salary stack on one tax return, triggering Medicare surcharge until SSA-44 fixes it. A retired couple's home sale and final salary shared a tax year, raising Medicare premiums by $5,770 annually until SSA-44 reclassified their tax year post-retirement. Originally reported by 24/7…
Home Sale and Retirement Coincide
A couple sold their longtime home in 2026, the same year the husband retired from his job.
Final Salary and Taxable Gain
His final salary was $180,000. After basis, selling costs, and Section 121 exclusion, $150,000 of home gain remained taxable.
Stacked Tax Year Triggers Surcharge
Social Security read the 2026 return in 2028 to set Medicare premiums, raising costs by $5,770 annually for both spouses.
IRMAA Threshold Impact
Roughly 8% of Medicare beneficiaries pay any IRMAA surcharge, but joint MAGI under $218,000 avoids it.
SSA-44 Fixes Tax Year
Form SSA-44 lists work stoppage as a qualifying life-changing event to reclassify tax years post-retirement.
Retirement Separates Events
Selling in 2027 instead of 2026 would have kept joint MAGI below $218,000, avoiding the surcharge entirely.
SSA-44 Process
File Form SSA-44 with retirement documentation to replace the 2026 return with a newer tax year estimate.
The takeaway
A retired couple's home sale and final salary shared a tax year, raising Medicare premiums by $5,770 annually until SSA-44 reclassified their tax year post-retirement.
