Question

Determine the taxable amount of social security benefits for the following situations.

If required, round your answers to the nearest dollar. If an amount is zero, enter "0".

a. Erwin and Eleanor are married and file a joint tax return. They have adjusted gross income of $41,200, no tax-exempt interest, and $14,420 of Social Security benefits. As a result, $ of the Social Security benefits are taxable.

b. Assume Erwin and Eleanor have adjusted gross income of $15,200, no tax-exempt interest, and $16,720 of Social Security benefits. As a result, $ of the Social Security benefits are taxable.

c. Assume Erwin and Eleanor have adjusted gross income of $115,000, no tax-exempt interest, and $17,250 of Social Security benefits. As a result, $ of the Social Security benefits are taxable.

Answer 1

a)
No tax Exempt of Interest = $14,420 x 50%	$7,210
Taxable Social Security benefits =.5[$41,200 + .5($14,420) - $32,000]	$8205
b)
No tax Exempt of Interest = $16720 x 50%	$8360
Taxable Social Security benefits =.5[$15200 + .5($16720) - $32,000]	-$4220
Taxable Social Security benefits will be $0 it is a negative number.	$0
c)
Include lesser of the following
a. No tax Exempt of Interest = $17250 x 85%	$14663
b. Sum of
1)Taxable Social Security benefits =.85[$115000 + .5($17250) -$44,000]	$67681
Lesser of
2)Amount calculated by first formula
No tax Exempt of Interest = $17250 x 50%	$8625
Taxable Social Security benefits =.5[$115000 + .5($17250) - $32,000]	$91625
Lesser value = $8625
Total = $625+$67681	$68306
Because 85% of social security benefit received is less than the $68306 so Social security benefit is	$14663