Question

Tala, who is married and filing joint return, received $30,000 interest and dividend income in 2019. She also received $10,000 interest from municipal bonds. Her MAGI for 2019 is $58,000. How much of her social security benefit is taxable?

Naser and Suzan, who are married and file a joint return, have AGI for the current year (2019) of $42,000. In addition, they received tax-exempt interestincome of $6,000 and Social Security benefits of $15,000. The Social Security benefits to be excluded from Naser and Suzan’s taxable income for 2019 is:

	A.	$15,000.
	B.	$7,500.
	C.	$2,250.
	D.	$12,750..
	E.	some other amount.

Answer 1

First part:

Her MAGI is more than threshold applicable. Social security benefits are taxable upto 85% of benefits received.

Second part:

Ref	Particulars	Amount
	MAGI plus 50% of SS:
	MAGI	48,000
50%SS	Add: 50% of SS	7,500
	Total	55,500
	Less: base amount	(32,000)
a	First excess	23,500
b	Less: second base	(12,000)
	Second excess	11,500
c	Smaller of two a,b	12,000
d	50% of c	6,000
e	Smaller of d and 50%SS	6,000
f	× 85% of second excess	9,775
g	Add e,f	15,775
h	85% of SS	12,750
min(g,h)	Taxable benefits	12,750
	Tax exempt	2,250

answer is 2,250

please rate.