Glossary
MAGI (Modified Adjusted Gross Income)
The income figure used to decide whether you pay an extra amount for Medicare. It is said "MAG-eye".
MAGI stands for Modified Adjusted Gross Income, and it is said out loud as "MAG-eye". It starts with your adjusted gross income, which is the number near the bottom of the first page of your tax return, and then adds back certain income that was not taxed. For Medicare purposes the main thing added back is tax-exempt interest, such as interest from municipal bonds. Social Security asks the Internal Revenue Service for this figure and uses it to decide whether you owe the extra Medicare charge known as IRMAA. This matters to you because income that felt tax-free during the year can still count here. A retiree living on Social Security plus tax-exempt bond interest may have a MAGI noticeably higher than the taxable income shown on the return, and that higher number is the one Medicare uses.