Bart, a single taxpayer, has recently retired. This year, he received $24,000 in pension payments and $5,000 of social security payments. What amount must Bart include in his gross income for the social security payments?

Question

Quizplus · Accepted Answer

His modified AGI + 50% of Social Security benefits is $24,000 + $2,500 = $26,500, which is greater than $25,000 but less than or equal to $34,000. His taxable Social Security benefits are the lesser of (a) $2,500 (50% of his Social Security benefits or (b) 50 percent of [$24,000 modified AGI + $2,500 (50% of Social Security benefits) − $25,000] = $750. Thus, his taxable Social Security benefits are $750.

Bart, a Single Taxpayer, Has Recently Retired