Compute her monthly exclusion. How much gross income does she report in the firs

Question

Compute her monthly exclusion. How much gross income does she report in the first year if she receives 12 monthly checks? Social Security Benefits. Dan and Diana file a joint return. Dan earned S31,000 during the year before losing his job. Diana received Social Security benefits of $5,000 Determine the taxable portion of the Social Security benefits. What is the taxable portion of the Social Security benefits if Dan earned $46,000? Social Security Benefits. Lucia is a 69-year-old single individual who receives a taxable

Explanation / Answer

a. The rules regarding the taxability of social security benefits provide that:

If filing jointly and the combined income is between $32,000 and $44,000

pay income tax on up to 50 percent of your benefits

Combined income = $31000 + 50% of 5000 = $33500

Hence, the combined income exceeds the base amount of taxable income, tax has to be paid on 50% of social security benefits

Taxable social security benefits = 50% of 5000 = $2500

b. Combined income =  $46000 + 50% of 5000 = $48500

Taxable portion of social security benefits = 85% of 5000 = $4250

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