During the 2014 tax year, Brian, a single taxpayer, received $6,000 in Social Security benefits. His adjusted gross income for the year was $18,000 (not including the Social Security benefits) and he received $30,000 in tax-exempt interest income. Calculate the amount of the Social Security benefits that Brian must include in his gross income for 2014.
Simplified Taxable? Social Security Worksheet (for most people)
1. Enter the total amount of Social Security income.                             1. ________
2. Enter one-half of line 1.                                                                           2. ________
3. Enter the total of taxable income items on Form 1040 except         3. ________
Social Security income.
4. Enter the amount of tax exempt interest income.                              4. ________
5. Add lines 2, 3, and 4.                                                                                 5. ________
6. Enter all adjustments for AGI except for student loan interest,        6. ________
the domestic production activities deduction, and the tuition and
fees deduction.
7. Subtract line 6 from line 5. If zero or less, stop here, none of           7. ________
the Social Security benefits are taxable.
8. Enter $25,000 ($32,000 if married filing jointly; $0 if                            8. ________
married filing separately and living with spouse at any time
during the year).
9.  Subtract line 8 from line 7. If zero or less, enter -0-.                           9. ________
If line 9 is zero or less, stop here; none of your benefits are
taxable. Otherwise, go on to line 10.
10. Enter $9,000 ($12,000 if married filing jointly; $0 if                            10. ________
married filing separately and living with spouse at any time
during the year).
11. Subtract line 10 from line 9. If zero or less, enter -0-.                         11. ________
12. Enter the smaller of line 9 or line 10.                                                     12. ________
13. Enter one-half of line 12.                                                                         13. ________
14. Enter the smaller of line 2 or line 13.                                                     14. ________
15. Multiply line 11 by 85% (.85). If line 11 is zero, enter -0-.                    15. ________
16. Add lines 14 and 15.                                                                                  16. ________
17. Multiply line 1 by 85% (.85).                                                                      17. ________
18. Taxable benefits. Enter the smaller of line 16 or line 17.                    18. ________