26 LoA Compute the taxable Social Security benefits in each

26. Lo.A Compute the taxable Social Security benefits in each of the following a. Erwin and Eleanor are married and file a joint tax return. They have adjusted situations: gross income of $46,000, no tax-exempt interest, and $12,400 of Social Security b. Erwin and Eleanor have adjusted gross income of $12,000, no tax-exempt interest c. Erwin and Eleanor have adjusted gross income of $85,000, no tax-exempt interest, benefits. and $16,000 of Social Security benefits. and $15,000 of Social Security benefits.

Solution

a. Taxable amount = 10540

b. Taxable amount = 0.

Since MAGI + 50% of social security received= 12000+ 16000*50% = 20000 is with in 32000 limit no social security is taxable.

c. Taxable amount= 12750

	Modified AGI
	AGI excl social security	46,000
	Plus:
	Tax exempt interest income	-
A	Modified AGI	46,000
Condition
A	Modified AGI	46,000
a	Social security benefits	12,400
b	50% of a	6,200
C=	A+b	52,200
	Condition amount
C	MAGI + 50% of social security=	52,200
	Range of taxable social security benefits falls in
	Range strats	Condition amount	Range ends		Taxable ratio			Additional taxable amount ( applicable for 85% category)	Taxable amount
	a	b	c	d= b-a	e	f= d*e	g= social security received*e	i= lesser of 6000 or 50%*social security amount	h= Lesser of g, (f+i)
	0		32,000	-	0%	-	-	-	-
	32,000		44,000	-	50%	-	6,200	-	-
	44,000	52,200		8,200	85%	6,970	10,540	6,000.00	10,540
	Total taxable social security benefits =		10,540