Question

George and Weezy received $27,500 of Social Security benefits this year ($10,200 for George; $17,300 for Weezy). They also received $4,400 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.)

b. George and Weezy file married separate and receive $7,950 of dividend income from stocks owned by George.

c. George and Weezy file married joint and receive $30,600 of dividend income from stocks owned by George.

d. George and Weezy file married joint and receive $15,300 of dividend income from stocks owned by George.

Answer 1

Solution b:

Social security benefit to be included in Gross Income - file married separate
Particulars	George	Weezy
Social Security benefits	$10,200.00	$17,300.00
Modified AGI (Interest + Dividend)	$10,150.00	$2,200.00
85% of social security benefits (A)	$8,670.00	$14,705.00
85% (Modified AGI + 50% of social security benefits) (B)	$12,962.50	$9,222.50
Social security benefit to be included in Gross Income - Lower of A & B	$8,670.00	$9,222.50

Solution c:

As george and weezy file married joint, there modified AGI Plus 50% of social security benefit =

$4,400 + $30,600 + (50% of $27,500) = $48,750 which exceeds $44,000

Therefore they must include in gross income lesser of

a) 85% of social security benefits = 27500 * 85% = $23,375

b) 85% (Modified AGI + 50% of social security benefits - $44,000) = 85% ($35,000 + $13,750 - $44,000) = $4,038

Plus

Lesser of

a) $6,000

b) 50% of social security benefits = $27,500*50% = $13,750

Thus amount to be included in Gross Income = $4,038 + $6,000 = $10,038

Solution c:

As george and weezy file married joint, there modified AGI Plus 50% of social security benefit =

$4,400 + $15,300 + (50% of $27,500) = $33,450 that falls between $32,000 and $44,000

Therefore they must include in gross income lesser of

a) 50% of social security benefit = $27,500*50% = $13,750

b) 50% of (Modified AGI + 50% of social security benefit - $32,000) = 50% ($4,400 + $15,300 + ($27,500*50%) - $32,000) = $725

Hence social security benefit to be included in Gross Income = $725