Question

Which of the following taxpayers' social security benefits will be taxed at 50%?

Jordan, a nondependent taxpayer filing single, whose modified AGI plus one-half of his net social security benefits is $11,200.

Georgia, who files head of household, and whose modified AGI plus one-half of her net social security benefits is $25,000.

Clive, who hasn’t been able to locate his wife in three years, files married filing separately, and whose modified AGI plus one-half of his net social security benefits is $30,000.

Andrea, who files married filing jointly, and whose AGI plus one-half of the net social security benefits is $44,001.

Answer 1

Answer:

Among the above given taxpayers, "Clive, who hasn't been able to locate his wife in three years, files married filing separately and whose modified AGI plus one-half of his net social security benefits is $30,000" will be taxed at 50%.

Explanation:

Social security benefits are provided to supplement income in retirement and provide certain benefits for disabled, spouses and dependents. So, you should also be taxed on social security benefits. You are liable to social security benefits if: Your Adjusted Gross Income + Nontaxable interest + 1/2 of your social security benefits > base amount.

The base amounts are $32000 for jointly filing taxpayers and $25000 for taxpayers filing as single. So these taxpayers who owe tax on their social security benefits will be taxable up to 50% of their benefits. If their MAGI is more than $34000 (filing as single) and $44000 (jointly filing) then they owe 85% of their benefits.

So, in the above option, Clive files married filing separately (considered as single) whose modified AGI plus one-half of his net social security benefits is $30000 (which is between $25000-$34000) Thus, he will be taxed at 50%.