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Income Tax Planning
Chapter 5: Gross Income from Employment/SOCIAL SECURITY TAXATION: 85%
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Chapter Study Session

Chapter 5: Gross Income from Employment

SOCIAL SECURITY TAXATION: 85%

01.Core Concepts

• If MAGI plus one-half of Social Security benefits exceeds the adjusted base amount, the amount of benefits i ncluded in gross income is the lesser of: • 85% of Social Security benefits, or • 85% x [MAGI + (50% x Social Security benefits) – adjusted base amount], plus • Lesser of: Amount included from “50% formulas” or $4,500 ($6,000 for married filing jointly; $0 for married filing separately)