Caroline,who files as head of household,received $9,000 of social security benefits.Her AGI before the social security benefits was $27,000.She also received $200 of tax- exempt interest.What is the amount of taxable social security benefits?

Question

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First, we need to calculate Caroline's provisional income by adding one-half of her social security benefits ($4,500) to her AGI ($27,000) and tax-exempt interest ($200). This gives us a provisional income of $31,700. 
Since Caroline files as head of household and her provisional income falls between $25,000 and $34,000, up to 50% of her social security benefits are taxable. Therefore, the amount of taxable social security benefits is 50% of $9,000, or $4,500. 
Therefore, the correct answer is D: $3,350.

Caroline,who Files as Head of Household,received $9,000 of Social Security