Question

Dave and Delores file a joint return. Dave earned $36,000 during the year before losing his job. Delores received Social Security benefits of $6,000. Requirements Determine the taxable portion of the Social Security benefits. b. What is the taxable portion of the Social Security benefits if Dave earned $43,000? a. Requirement a. Determine the taxable portion of the Social Security benefits. Begin by computing the provisional income. Only select iems that are applicable to Dan and Diana. (Leave unused cells blank, do not select a label or enter a zero.) Plus: Provisional income The taxable portion of the Social Security benefits is Requirement b. What is the taxable portion of the Social Security benefits if Dave earned $43,000? Begin by computing the provisional income. The provisional income is The taxable portion of the Social Security benefits is

Answer 1

The taxability portion of Social Security benefits depends on Provisional income. Provisional Income is calculated by adding total income (including tax-exempt interest income) to the half of the amount of annual Social Security benefit. Therefore, Provisional Income = Total income+ (Social Security benefit x 50%) The taxable portion of Social Security benefit received is as follows: Filing Status Provisional income Taxable portion of Social security benefit $32,000 or Less 0% Social Security benefits x 0% Married filing jointly $32,001 to 44,000 50% Social Security benefits x 50% Exceeds $44,000 85% Social Security benefits x 85%

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Requirement a
Gross income	$36,000
Plus: 50% of Social Security benefits   [6,000 x 50%]	$3,000
Provisional income                                 [$36,000 + $3,000]	$39,000

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The taxable portion of the Social Security benefit is      [Social Security benefit x 50% = $6,000 x 50%]

$3,000

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Requirment b
The Provisional income is                                              [Refer working note below]	$46,000
The taxable portion of the Social Security benefit is      [Social Security benefit x 85% = $6,000 x 85%]	$5,100

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Working note - Calculation of provisional income
Gross income	$43,000
Plus: 50% of Social Security benefits     [6,000 x 50%]	$3,000
Provisional income                                 [$43,000 + $3,000]	$46,000