George and Weezy received $29,100 of Social Security benefits this year ($11,000

Question

George and Weezy received $29,100 of Social Security benefits this year ($11,000 for George; $18,100 for Weezy). They also received $4,800 of interest from jointly owned City of Ranburne Bonds and dividend income.

What amount of the Social Security benefits must George and Weezy include in their gross income under the following independent situations? (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount. Leave no answer blank. Enter zero if applicable.)

George and Weezy file married joint and receive $32,200 of dividend income from stocks owned by George.

Explanation / Answer

Answer :

Because George and Weezy file married joint and their modified AGI + 50% oftheir Social Security benefits ($4,800 interest + $32,200 dividends + (50% ($29,100))=$51,550) exceeds $44,000, they must include in gross income the lesser of (a) 85 percent of their Social Security benefits (85% ($29,100)= $24,735), (b) 85 percent of(their modified AGI + 50% of their Social Security benefits - $44,000 = ($4,800 interest+ $32,200 dividends + (50% ($29,100) -$44,000) =$7,550), plus the lesser of (1)$6,000 or (2) 50 percent of Social Security benefits (50% ($29,100)=$14550). Thus,they must include in income the lesser of (a) $24,735 or (b) 85 percent of $7,550(6,418), plus the lesser of (1) $6,000 or (2) $14,550 , which simplifies to $12,418.

So the amount of social security benifits is $12,418.

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