Question

Determine the taxable amount of Social Security benefits for the following situations.

If required, round your answers to the nearest dollar. If an amount is zero, enter "0".

a. Erwin and Eleanor are married and file a joint tax return. They have adjusted gross income of $41,000, no tax-exempt interest, and $14,350 of Social Security benefits. As a result, $________ of the Social Security benefits are taxable.

b. Assume Erwin and Eleanor have adjusted gross income of $113,500, no tax-exempt interest, and $17,025 of Social Security benefits. As a result, $_________ of the Social Security benefits are taxable.

Answer 1

For married filing jointly, the social security benefits are taxable to 50% for the combined income between $32,000 and $44,000.

For married filing jointly, the social security benefits are taxable to 85% for the combined income more than $44,000.

Part A

Taxable amount of social security benefits is lower of the following two:

Taxable amount of social security benefits = 14350*50% = $7,175

Taxable amount of social security benefits = 41,000+(14,350*50%)-32000 = $16,175

Therefore,

Taxable amount of social security benefits = $7,175

Part B

Taxable amount of social security benefits is lower of the following two:

Taxable amount of social security benefits = 17,025*85% = $14,471.25

Taxable amount of social security benefits = 113,500+(17,025*85%)-44000 = $83,971.25

Therefore,

Taxable amount of social security benefits = $14,471.25