IRMAA

A small-business owner planning to sell his company using a five-year installment note, spreading out capital gains taxes across the payment period, is being warned that the strategy carries a hidden cost. Under Medicare rules, the installment income could count as income in each year it is received, pushing him above IRMAA thresholds and triggering premium surcharges for multiple consecutive years. Advisers note that installment sales are a common tax-deferral tool, but retirees approaching Medicare eligibility often overlook how the extra annual income raises their Part B and Part D premiums well beyond the sale itself.