In: Accounting
In 2020, Marcus, single, received municipal bond interest of $10,000, unemployment compensation of $5,000, ordinary dividends of $15,000 and social security benefits of $10,000. Marcus has no adjustments. What amount of Marcus’ SS benefits are included in gross income?
SOLUTION:-
Social security benefits included in gross
income = 10,000 x 85% 8500
Interest From Municipal bonds | $ 10,000.00 |
Unemployment compensation | $ 5,000.00 |
Ordinary Dividends | $ 15,000.00 |
social security benefits = 1/2 x 10000 | $ 5,000.00 |
Total Income | $ 35,000.00 |
There are certain situations when seniors must include their Social Security benefits in gross income. If they are married but file a seperate tax return and live with your spouse at any time during the year, then 85% your Social Security benefits are included in gross income. In addition, a portion of their Social Security benefits are included in gross income, regardless of their filing status, in any year the sum of half their Social Security plus all other income, including tax - exempt interest, exceeds $25,000 filing single.
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