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 these.

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. The actual calculation of the taxable amount is based on a formula that takes into account the taxpayer's filing status, Social Security benefits, and other sources of income.

The Amount of Social Security Benefits Received by an Individual