Question

Question 8
Which of the following items should be included in gross income?

1) Life insurance proceeds

2) Child support payments

3) Accident and health insurance proceeds

4) Cash rebate from a dealer on a car purchase

5) Moving expense reimbursements received from an employer

Question 9
Ms. Green is single and over 65 years old. She received the following income in 2019:

         
    Interest from certificates of deposit   $3,000
    Tax-exempt interest   6,000
    Taxable dividends   5,000
    Taxable pension   20,000
    Wages from consulting work   9,000
    Social security   14,000

She did not have any adjustments to income. What is the taxable amount of Ms. Green's social security?

1) $7,000

2) $7,650

3) $9,000

4) $11,900

Answer 1

Question 8 : Moving expense reimbursements received from the employer are no longer exempt and hence it should be included in gross income (option 5)

Question 9 :

Total income ( total income for social security includes taxable and non taxable income + half of social security)

Total income : 3000+6000+5000+20000+9000+0.5(14000) = 50000

As the total income exceeds 34000 , 85% of social security is taxable

Taxable Social security : 85%(14000) = 11900

Answer : option 4