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 $40,800, no tax-exempt interest, and $14,280 of Social Security benefits. As a result, $ of the Social Security benefits are taxable.

b. Assume Erwin and Eleanor have adjusted gross income of $18,800, no tax-exempt interest, and $20,680 of Social Security benefits. As a result, $ of the Social Security benefits are taxable.

c. Assume Erwin and Eleanor have adjusted gross income of $94,000, no tax-exempt interest, and $14,100 of Social Security benefits. As a result, $ of the Social Security benefits are taxable.

Answer 1

SOLUTION :

social security benefits for filling a joint tax return , in case of married couple :

* if income is in the range of $32,000 to $44,000 , 50% of benefits

* if income more than $44,000 ,85% of benefits

a)

given AGI = $40800

therefore

(i) taxable social security benefits= $14,280*50%= $7140

(ii)taxable social security benefits= (40800 + 7140 - 32000) *50% = $7970

hence the amount which is lesser of (i) and (ii) is taxable

therefore

$7140 amount of social security benefits are taxable

b)

given

AGI = $18800

Therefore

no tax

c)

given

AGI = 94000

therefore

taxable social security benefits= $14,100*85%= $11985