Question

JOE AND ANNE FILE A JOINT RETURN. THEIR AGI BEFORE SOCIAL SECURITY WAS $ 5, 000 , AND THEY RECEIVED $8000 IN BENEFITS. THEY HAD NO ITEMS TO ADD BACK TO AGI.

a) THEIR PROVISIONAL INCOME IS

b) OF JOE AND ANNE'S SOCIAL SECURITY ARE TAXABLE

Answer 1

Full solution is worked out below:

Solution to Part (a) Particulars Amount ($) 5000 AGI Before Social Security Add: 50% of Social Security Benefits (50% of $8000) 4000 Provisional Income 9000 Solution to Part (b) For joint filers, if provisional income is less than $32000, then Social Security benefits are taxable @ 0%. Since in above case, provisional income is $9000, therefore Social Security Benefits are not taxable.