Reva is a single taxpayer with a taxable pension of $24,000,tax-exempt interest of $8,000,and Social Security benefits of $10,000.What is the amount of her taxable Social Security benefits?

Question

Quizplus · Accepted Answer

To determine the amount of taxable Social Security benefits for a single taxpayer, you need to complete the following calculation:

1. Add half of the Social Security benefits to all taxable income (taxable pension and tax-exempt interest):
($10,000/2) + $24,000 + $8,000 = $32,000

2. Compare the result from step 1 to the base amount of $25,000 for single taxpayers:
$32,000 - $25,000 = $7,000

3. Take the smaller of the two amounts from step 1 and step 2:
$7,000 is smaller than half of the Social Security benefits ($10,000/2 = $5,000).

Therefore, the amount of taxable Social Security benefits for Reva is $7,050 (rounded to the nearest dollar). The correct answer is C.

Reva Is a Single Taxpayer with a Taxable Pension of $24,000,tax-Exempt