Question

Bert is a single individual and received a salary of $29,400 before he retired in October of this year. After he​ retired, he received Social Security benefits of $3,200 during the year.

a. What​ amount, if​ any, of the Social Security benefits are taxable for the​ year?

b. Would the answer be different if Bert also had $1,600 of​ tax-exempt interest?

c. What if he had had $8,400 of​ tax-exempt interest?

Answer 1

a) 50% of the social security benefits are taxable that is $1600 of the social security benefits would be taxable.[Refer Note 1]

b)Yes, the answer would have been different than the total tax would be $29400+$1600-$1600=$29,400.

The effect of 50% of social security benefits will be negligent by the tax-exempt interest.

c)Then Bert's total tax liability would be $29400+$1600-$8400=$22,600.

file a federal tax return as an "individual" and your combined income* is

• between $25,000 and $34,000, you may have to pay income tax on up to 50 percent of your benefits.

And since, Bert is a single individual and Bert's combined income =$29,400+$3200=$32,600 is between the limit so, 50% of the social security benefits of Bert's will be taxable.