Question

George and Weezy received $27,700 of Social Security benefits this year ($10,300 for George; $17,400 for Weezy). They also received $4,450 of interest from jointly owned City of Ranburne Bonds and dividend income. What amount of the Social Security benefits must George and Weezy include in their gross income under the following independent situations?

George and Weezy file married joint and receive $30,800 of dividend income from stocks owned by George.

Answer 1

$10,335

Because George and Weezy file married joint and their modified AGI + 50% of their Social Security benefits ($4,450 interest + $30,800 dividends + (50% ($27,700)) =$49,100) exceeds $44,000, they must include in gross income the lesser of (a) 85 percent of their Social Security benefits (85% ($27,700)= $23,545), (b) 85 percent of (their modified AGI + 50% of their Social Security benefits - $44,000 = ($4,450 interest + $30,800 dividends + (50% ($27,700) -$44,000) =$5,100), plus the lesser of (1) $6,000 or (2) 50 percent of Social Security benefits (50% ($27,700)=$13,850). Thus, they must include in income the lesser of (a) $23,545 or (b) 85 percent of $5,100 (4,335), plus the lesser of (1) $6,000 or (2) $13,850 , which simplifies to $10,335