Question

kevin, a 69 year old single taxpayer, received 20,000 in social benefits in 2017. He also earned 12,000 in wages and 6,000 in interest income, 4,000 of which was tax exempt. what percentage of kevin

Answer 1

Answer:

he taxability of social security benefits will depend upon the amount of combined income. So that first need to compute combined income.

Combined income = (Security benefits x 1/2) + Other income including exempt interest

= ($20,000 x 1/2) + ($12,000+$6,000)

=$10,000+$12,000+$6,000

=$28,000

Combined income is between $25,000 and $34,000. So that 50% of the social security income is taxable.

Taxable Income:

Wages	$12,000
Interest income (6,000 - 4,000 exempt)	$2,000
Social security benefits (20,000 x 50%)	$10,000
Taxable Income	$24,000