Compute the taxable SS benefits in the following situations: 1. Edward and Emily are married and...

Compute the taxable SS benefits in the following situations:

1. Edward and Emily are married and file a joint tax return. they have adjusted gross income of $46,000 no tax exempt interest, and $12,400 of SS benefits.

2. Edward and Emily have adjusted gross income of $12,000 no tax exempt interest, and $16,000 of SS benefits.

3. Edward and Emily have adjusted gross income of $85,000 no tax exempt interest and $15,000 of SS benefits.

Please explained in a detailed way and show how you got the numbers.

Solutions

Expert Solution

Part 1) No social security will be taxable because the couple who files jointly have to pay upto 50% of SS benefit if their gross income is between $32000 to $44000. But in this case it is $46000.

Part 2) In this case SS benfit is not taxable because their gross income is not more than $44000.

Part 3) In this case SS benefit is taxable upto 85% because their gross income is more than $44000.

i.e. 85% of 15000 = $12750 Is taxable.

Basic Rules for SS BENEFITS are

Taxable upto 85% if gross income is more than $44000 for couples and Taxable upto 50% if gross income is between $32000 to $44000 for the couples filing jointly.

jeff jeffy answered 2 years ago

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