The amount of Social Security benefits received by an individual that he or she must include in gross income:
A)Is computed in the same manner as an annuity [exclusion = (cost/expected return) ´ amount received].
B)May not exceed the portion contributed by the employer.
C)May not exceed 50% of the Social Security benefits received.
D)May be zero or as much as 85% of the Social Security benefits received, depending upon the taxpayer's Social Security benefits and other income.
E)None of the above.

Question

Quizplus · Accepted Answer

The amount of Social Security benefits received by an individual that he or she must include in gross income may be zero or as much as 85% of the Social Security benefits received, depending upon the taxpayer's Social Security benefits and other income. This is determined by applying a formula that compares the taxpayer's "combined income" (defined as adjusted gross income + nontaxable interest + 50% of Social Security benefits) to certain threshold amounts. If the taxpayer's combined income is above the threshold, up to 85% of the Social Security benefits received may be included in gross income.

The Amount of Social Security Benefits Received by an Individual