Bill James retied at age 66 and started receiving Social Security benefits. Bill

Question

Bill James retied at age 66 and started receiving Social Security benefits. Bill, now aged 68, accepted a party-time consulting job that pays $25,720 per year in the year of 2015. He is in a 25% marginal income tax bracket, including his company pension benefits. The Social Security earnings limit is $15,720 for the year 2015. Assuming Bill was receiving Social Security benefits of $10,000 per year, how much Social Security will Bill be entitled to in the year 2015?

(a) $ 0
(b) $5,000
(c) $7,500
(d) $10,000

Explanation / Answer

Social Security will Bill be entitled to in the year 2015 = $ 10000

Answer

(d) $10,000

Note : The Social Security earnings limit is irrelevant , Social security benefiet ecieved is to be considered in it while cllculation of tax liability & exemption on it

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