Question

Grady received $8,800 of Social Security benefits this year. Grady also reported salary and interest income this year.

a. Grady files single and reports salary of $13,600 and interest income of $400

b. What amount of the benefits must Grady include in his gross income under the following five independent situations? (Leave no answer blank. Enter zero if applicable.)

c. Grady files married joint and reports salary of $78,000 and interest income of $650.

d. Grady files married joint and reports salary of $44,000 and interest income of $850.

e. Grady files married separate and reports salary of $23,650 and interest income of $750.

.

Answer 1

	Social security benefit included in GI
a. Grady files single and reports salary of $13,600 and interest income of $400	$              -
b. Grady files married joint and reports salary of $78,000 and interest income of $650.	$   7,480.00
c. Grady files married joint and reports salary of $44,000 and interest income of $850.	$   7,480.00
d. Grady files married separate and reports salary of $23,650 and interest income of $750.	$   7,480.00
a)
M income = adjusted gross income + nontaxable interest + half of your Social Security benefits
Combined income = $13600 + $400 + (1/2 x 8800)	$ 18,400.00
Combined Income $18,400  is below the minimum amount $25,000 or less for single taxpayers for including Social Security benefits
Grady excludes the entire $8,800 Social Security benefits.
b)
Combined income = $78000 + $650 + (1/2 x 8800)	$ 83,050.00
Grady's modified AGI is well above the maximum amount ($44,000 for married joint) for including Social Security benefits
Lesser of— 85 percent of benefit income; or amount from line 5 plus 85 percent of modified AGI in excess of $44,000
Social security  benefit = 85% x 8800	7480
85 percent of (83050 - $44,000]= $33192.50 , plus the lesser of (1) $6,000 or (2) 50 percent of Social Security benefits ($4400).	$ 37,592.50
c)
Combined income = $44000 + $850 + (1/2 x 8800)	$ 49,250.00
Grady's modified AGI is well above the maximum amount ($44,000 for married joint) for including Social Security benefits
Lesser of— 85 percent of benefit income; or amount from line 5 plus 85 percent of modified AGI in excess of $44,000
Social security  benefit = 85% x 8800	$   7,480.00
or
85 percent of (49250 - $44,000) ]= $4,462), plus the lesser of (1) $6,000 or (2) 50 percent of Social Security benefits ($4,400).	$   8,862.00
d)
Combined income = $2360 + $750 + (1/2 x 8800)	$ 28,800.00
Grady's modified AGI is well above the maximum amount ($44,000 for married joint) for including Social Security benefits
Lesser of— 85 percent of security  benefit income; or  85 percent of modified Agi
Social security  benefit = 85% x 8800	$   7,480.00
or
85% x 28800	$ 24,480.00