A viable tax planning strategy for individuals with taxable Social Security is to:

Question

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By reducing modified income to $32,000 for married couples, the taxpayer can avoid higher taxation on their Social Security benefits. Modified income is calculated by taking half of Social Security benefits, adding other taxable income, and any tax-exempt interest earned. By reducing other taxable income (such as through retirement account contributions or deductions), the taxpayer can stay below the threshold for higher Social Security taxation. Rejecting Social Security income altogether (A) is not a viable option for individuals who have contributed to the system and need the income in retirement. Reporting only $32,000 as income regardless of actual income earned (C) would be fraudulent and illegal. Separating Social Security income from Medicare income (D) is not a tax planning strategy relevant to Social Security taxation.

A Viable Tax Planning Strategy for Individuals with Taxable Social