Question

Boyd 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 $4,600 during the year. Read the requirements. Requirement a. What amount, if any, of the Social Security benefits are taxable for the year? Begin by computing the provisional income. Only select iems that are applicable to Boyd. (Leave unused cells blank, do not select a label or enter a zero.) Plus: Provisional income i Requirements -X a. b. What amount, if any, of the Social Security benefits are taxable for the year? Would the answer be different if Boyd also had $1,400 of tax-exempt interest? What if he had had $9,600 of tax-exempt interest? Cho C.

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Answer 1

The Social security income will only be taxable if you have income from other sources and your combined income is more than $25000. than half of Social security income is taxable.

and if the combined income exceeds $34000 than 85% social security income is taxable.

Base amount=$25000-$34000 for individual filers in 2019 and 2020

a) since combined income is more than $25000

So, half of social security income will be taxable

=$4600*50%

=$2300

NOTE:-

There combined income is = salary income+50% of social security income.

$29400+2300= $31700

b) No, my answer will not change income will only be 50% taxable

As combined income will become $33100

Which is lower than $34000

*Combined income=29400+1400+2300

=$33100

C) Since, combined income* is more than $34000

So, social security income will be taxable by 85%

=$4600*85%

=$3910

So, total tax on soccial security will be $3910

Note:-

* Combined income= income from salary + tax exempted interests

= $29400 + $ 9600

= $39000