Question

George and Weezy received $28,900 of Social Security benefits this year ($10,900 for George: $18,000 for Weezy). They also received $4,750 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? (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount. Leave no answer blank. Enter zero if applicable.) Problem 5-67 Part-b b. George and Weezy file married separate and receive $8,650 of dividend income from stocks owned by George. George Weezy Amount to be included

Answer 1

If the married taxpayers are filing separate returns then, the lower of 85 percent of the sum of modified AGI and 50 percent of Social Security benet or 85 percent of their Social Security benet would be liable to tax.

Taxable Income = Lower of (85% × Social Security benefits) or [85% {Modified AGI + (50% × Social Security benefits)}]

Lower of
85%*10900	$   9,265
85%*(8650+4750*50%+50%*10900)	$ 14,004
Amount to be included for George	$   9,265
Lower of
85%*18000	$ 15,300
85%*(4750*50%+50%*18000)	$   9,669
Amount to be included for Weezy	$   9,669