Question

Required:

A married couple received $8,200 of social security benefits.

1. Calculate the taxable amount of those benefits if the couple’s provisional income is $18,000.
2. Calculate the taxable amount of those benefits if the couple’s provisional income is $35,500.
3. Calculate the taxable amount of those benefits if the couple’s provisional income is $51,000

Taxable amount of benefits

a

b

c

Answer 1

Filing status : married filing jointly

* for married filing jointly having social security benefit and other income too, their base amount is $32000(half of   SS benefit + other income)

*please refer worksheet in Publication 915(issued by IRS) on Social Security and Rail Road Retirement Benefits

*amount mentioned in line (11), $12000 is, as given in the work sheet

case (a):Provisinal income is $18000

WORK SHEET A - QUICK WAY TO CHECK IF YOUR BENEFITS MAY BE TAXABLE

   A) social security benefits                               =     $8200

   B) half of social security benefits $8200 *50% =    $4100

C) Provisional income (excluding line A)                                      = $18000

D)Enter any tax exempt interest income                                             =       $0

E) add lines B,C,D,E      =       $22100

As the amount in line E is smaller than base amount of $32000, none of the benefits are taxable this year
                                                           

case (b):Provisional income is $35500

   1) social security benefits                               =     $8200

   2) half of social security benefits $8200 *50% =    $4100

3) Provisional income                                                            =    $35500

   4) Enter the amount,if any ,from form 1040or 1040SR line 2a......     =     $0

   5) any deductions or excclusions                    =    $0

   6) combine (2),(3) , (4) and (5)                             =    $39600

7) enter amounts from Schedule 1

   (form 1040 or 1040SR) lines 10 through 19         =       $0

8) is the amount in line (7) is less than on line(6)              =     $39600

      *if yes subtract line(7) from line(6)

       *if no,enter 0

9) enter base amount                                              =        $32000

10) is the amount in (9) is less than amount in line(8)

     *if YES   subtract (9) from(8)                = $7600

11) enter $12000 if married filing jointly                        =   $12000

12) subtract line (11) form line(10),if zero or less enter 0                  =       $0

13)smaller of line (11) or (10)                                                       =        $7600

14)multiply (13) by 50%                                                             =         $3800

15) enter smaller of the line (2) or(14)                                           =       $3800

16)multiply (12) by 85%                                                              =     $0

17)add (15) and (16) =$3800

18) multiply line (1) by 85%                                                       =       $6970

19) Taxable amount of benefit:enter smaller of line (17) or (18)     =       $3800

             TAXABLE AMOUNT OF BENEFIT=$3800

    

case (c):Provisinal income is $51000

1)social security benefits                                                         =       $8200

   2) half of social security benefits $8200 *50% =    $4100

3) Provisional income                                                           = $51000

4)Enter the amount,if any ,from form 1040or 1040SR line 2a......      =      $0

5) any deductions or excclusions                       =    $0

   6)combine (2),(3) , (4) and (5)                             = $55100

7) enter amounts from Schedule 1

    (form 1040 or 1040SR) lines 10 through 19            =       $0

8) Is the amount in line (7) is less than on line(6)             =     $55100

      *if yes subtract line(7) from line(6)

       *if no,enter 0

9) enter base amount                                                                   =   $32000

10)is the amount in (9) is less than amount in line(8)

     *if YES   subtract (9) from(8)                                      =      $23100

11) enter $12000 if married filing jointly                      =        $12000

12) subtract line (11) form line(10),if zero or less enter 0               =        $11100

13)smaller of line (11) or (10)                                                     =        $12000

14)multiply (13) by 50% =         $6000

15) enter smaller of the line (2) or(14)                                        =         $4100

16)multiply (12) by 85%                                                         =          $9435

17)add (15) and (16)                                                              =        $13535

18) multiply line (1) by 85%                                                   =          $6970

19) Taxable amount of benefit:enter smaller of line (17) or (18)   =      $6970

             TAXABLE AMOUNT OF BENEFIT=$6970