Question

1. Bess Norman is single and has the following sources of income in 2019:

Social security benefits                $13,550

Taxable Interest income               $6,930

Dividend income                          $7,480

Tax-exempt interest income         $11,204

Ms. Norman is 72 years of age and has 12,550 in itemized deductions. What is her taxable income for 2019?

Answer 1

Please find below answers :

S. No	Particulars	Amount
1	Taxable Interest Income	$                      6,930.00
2	Dividend Income	$                      7,480.00
3	Tax Exempt Income	$                    11,204.00
4	Social Security benefits tax	$                      6,775.00
	(13550*50%)
	Modified AGI	$                    32,389.00
B) Social Security taxable portion = 50% of (MAGI-$25000)
=50%(32389-25000)
$          3,694.50
$750 ( as per IRS ruling if modified AGI exceeds than $ 25000 then lower of social security tax ie $6775 or $750.
c) Taxable Income
S. No	Particulars	Amount
1	Taxable Interest Income	$                      6,930.00
2	Dividend Income	$                      7,480.00
4	Social Security benefits tax	$                          750.00
	Taxable Income	$                    15,160.00
	Less Deductions	$                    12,550.00
	Net Taxable Income	$                      2,610.00