SOCIAL SECURITY TAXATION: EXAMPLE 2 (2 OF 2)
01.Core Concepts
3. 0.85 x $15,000 = $12,750 4. 0.85 x [$53,000 + (0.50 x $15,000) - $34,000] = $22,525 plus the lesser of the amount calculated using the “50% formulas.” 1. 0.50 x $15,000 = $7,500 2. 0.50 x [$53,000 + (0.50 x $15,000) - $25,000] = $17,750 The lesser amount is $7,500. The formula 4 total is the lesser o f $30,025 ($22,525 + $7,500) or $27,025 ($22,525 + $4,500) The lesser of the formula 3 or 4 amount s is $12,750. Therefore, $12,750 of the Social Security benefits must be included in Andrea’s gross income.