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

Social Security benefits are taxable up to 85% if the taxpayer's combined income exceeds certain thresholds. Reva's combined income is $24,000 + $8,000 + $10,000 = $42,000, which exceeds the threshold for single taxpayers. Therefore, 85% of her Social Security benefits are taxable. 85% of $10,000 is $8,500.

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