TAXATION OF SOCIAL SECURITY (ALTERNATE METHOD)
01.Core Concepts
A = Excess of combined income over first hurdle B = Excess of combined income over second hurdle Taxable amount is lesser of the three formulas: 1. 50% (A) + 35% (B) 2. 85% of Social Security benefit 3. 50% of Social Security benefit + 85% (B) 29 EXAMPLE (1 OF 2) Beth & Bill have regular income of $35,000, muni income of $5,000 and receive Social Security benefits of $30,000. • MAGI + ½ SS benefit: • Taxable portion of Social Security benefits: