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21 November, 00:04

Ian, a single taxpayer, received $15,000 of Social Security retirement this year. He also received $16,000 of interest income. How much of Ian's Social Security benefits must be included in his gross income this year?

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  1. 21 November, 02:28
    0
    Combined income is $15,000+$16,000 = $31,000

    It is between $25,000 and $34,000, meaning Ian has to pay income tax on up to 50% of Social Security benefits.

    So 50% 0f the Social Security benefits must be included. $15,000*50% = $7,500
  2. 21 November, 03:18
    0
    Answer:0. none of Ian's social security benefit will be included in his gross income

    Explanation:

    Given the following;

    Social security retirement = $15,000

    Interest income received = $16,000

    Ian is a social security recipient.

    Therefore to calculate his combined income:

    Modified Adjusted Gross Income = $16,000

    50% of social security benefit

    0.5 * $15,000 = $7,500

    Ian's combined income = $ (7500+16000) = $23,500

    For single taxpayers, if combined income is less than $25,000, then such individual does not have to pay tax on social security benefit for that year.

    Therefore,

    Ian's combined income < $25,000

    So, none of Ian's social security benefit will be included in his gross income
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