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taxmap/pub17/p17-060.htm#en_us_publink1000171925

Examples(p84)


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The following are a few examples you can use as a guide to figure the taxable part of your benefits.
taxmap/pub17/p17-060.htm#en_us_publink1000171926

Example 1.(p84)

George White is single and files Form 1040 for 2009. He received the following income in 2009:
Fully taxable pension $18,600
Wages from part-time job 9,400
Taxable interest income 990
Total $28,990
George also received social security benefits during 2009. The Form SSA-1099 he received in January 2010 shows $5,980 in box 5. To figure his taxable benefits, George completes the worksheet shown here.
Worksheet 1.
Figuring Your Taxable Benefits
1. Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099. Also enter this amount on Form 1040, line 20a, or Form 1040A, line 14a $5,980
2. Enter one-half of line 1 2,990
3. Enter the total of the amounts from: 
  Form 1040: Lines 7, 8a, 9a, 10 through 14, 15b, 16b, 17 through 19, and 21. 
  Form 1040A: Lines 7, 8a, 9a, 10, 11b, 12b, and 13 28,990
4. Enter the amount, if any, from Form 1040 or 1040A, line 8b -0-
5. Form 1040 filers: Enter the total of any exclusions/adjustments for: 
 
  • Qualified U.S. savings bond
    interest (Form 8815, line 14),
  • Adoption benefits (Form 8839, line
    30),
  • Foreign earned income or housing
    (Form 2555, lines 45 and 50, or
    Form 2555-EZ, line 18), and
  • Certain income of bona fide
    residents of American
    Samoa (Form 4563, line 15)
    or Puerto Rico
 
  Form 1040A filers: Enter the total of any exclusions for qualified U.S. savings bond interest (Form 8815, line 14) or for adoption benefits (Form 8839, line 30). -0-
6. Add lines 2, 3, 4, and 5 31,980
7. Form 1040 filers: Enter the amount from Form 1040, lines 23 through 32, and any write-in adjustments you entered on the dotted line next to line 36. 
  Form 1040A filers: Enter the amount from Form 1040A, lines 16 and 17 -0-
8. Is the amount on line 7 less than the amount on line 6? 
  No. Stop None of your social security benefits are taxable. Enter -0- on Form 1040, line 20b, or Form 1040A, line 14b.
  Yes.  Subtract line 7 from line 6 31,980
9. If you are:
  • Married filing jointly, enter $32,000
  • Single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2009, enter $25,000
25,000
  Note. If you are married filing separately and you lived with your spouse at any time in 2009, skip lines 9 through 16; multiply line 8 by 85% (.85) and enter the result on line 17. Then go to line 18. 
10. Is the amount on line 9 less than the amount on line 8? 
  No. Stop None of your benefits are taxable. Enter -0- on Form 1040, line 20b, or on Form 1040A, line 14b. If you are married filing separately and you lived apart from your spouse for all of 2009, be sure you entered "D" to the right of the word "benefits" on Form 1040, line 20a, or on Form 1040A, line 14a. 
  Yes.  Subtract line 9 from line 8 6,980
11. Enter $12,000 if married filing jointly; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2009 9,000
12. Subtract line 11 from line 10. If zero or less, enter -0- -0-
13. Enter the smaller of line 10 or line 11 6,980
14. Enter one-half of line 13 3,490
15. Enter the smaller of line 2 or line 14 2,990
16. Multiply line 12 by 85% (.85). If line 12 is zero, enter -0- -0-
17. Add lines 15 and 16 2,990
18. Multiply line 1 by 85% (.85) 5,083
19. Taxable benefits. Enter the smaller of line 17 or line 18. Also enter this amount on Form 1040, line 20b, or Form 1040A, line 14b $2,990
The amount on line 19 of George's worksheet shows that $2,990 of his social security benefits is taxable. On line 20a of his Form 1040, George enters his net benefits of $5,980. On line 20b, he enters his taxable benefits of $2,990.
taxmap/pub17/p17-060.htm#en_us_publink1000171929

Example 2.(p85)

Ray and Alice Hopkins file a joint return on Form 1040A for 2009. Ray is retired and received a fully taxable pension of $15,500. He also received social security benefits, and his Form SSA-1099 for 2009 shows net benefits of $5,600 in box 5. Alice worked during the year and had wages of $14,000. She made a deductible payment to her IRA account of $1,000. Ray and Alice have two savings accounts with a total of $250 in taxable interest income. They complete Worksheet 1 and find that none of Ray's social security benefits are taxable. On line 3 of the worksheet, they enter $29,750 ($15,500 + $14,000 + $250). On Form 1040A, they enter $5,600 on line 14a and -0- on line 14b.
Worksheet 1.
Figuring Your Taxable Benefits
1. Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099. Also enter this amount on Form 1040, line 20a, or Form 1040A, line 14a $5,600
2. Enter one-half of line 1 2,800
3. Enter the total of the amounts from: 
  Form 1040: Lines 7, 8a, 9a, 10 through 14, 15b, 16b, 17 through 19, and 21. 
  Form 1040A: Lines 7, 8a, 9a, 10, 11b, 12b, and 13 29,750
4. Enter the amount, if any, from Form 1040 or 1040A, line 8b -0-
5. Form 1040 filers: Enter the total of any exclusions/adjustments for: 
 
  • Qualified U.S. savings bond
    interest (Form 8815, line 14),
  • Adoption benefits (Form 8839, line
    30),
  • Foreign earned income or housing
    (Form 2555, lines 45 and 50, or
    Form 2555-EZ, line 18), and
  • Certain income of bona fide
    residents of American
    Samoa (Form 4563, line 15)
    or Puerto Rico
 
  Form 1040A filers: Enter the total of any exclusion for qualified U.S. savings bond interest (Form 8815, line 14) or for adoption benefits (Form 8839, line 30) -0-
6. Add lines 2, 3, 4, and 5 32,550
7. Form 1040 filers: Enter the amount from Form 1040, lines 23 through 32, and any write-in adjustments you entered on the dotted line next to line 36. 
  Form 1040A filers: Enter the amount from Form 1040A, lines 16 and 17 1,000
8. Is the amount on line 7 less than the amount on line 6? 
  No. Stop None of your benefits are taxable. Enter -0- on Form 1040, line 20b, or Form 1040A, line 14b.
  Yes.  Subtract line 7 from line 6 31,550
9. If you are:
  • Married filing jointly, enter $32,000
  • Single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2009, enter $25,000
32,000
  Note. If you are married filing separately and you lived with your spouse at any time in 2009, skip lines 9 through 16; multiply line 8 by 85% (.85) and enter the result on line 17. Then go to line 18. 
10. Is the amount on line 9 less than the amount on line 8? 
  No. Stop None of your benefits are taxable. Enter -0- on Form 1040, line 20b, or on Form 1040A, line 14b. If you are married filing separately and you lived apart from your spouse for all of 2009, be sure you entered "D" to the right of the word "benefits" on Form 1040, line 20a, or on Form 1040A, line 14a. 
  Yes.  Subtract line 9 from line 8             
11. Enter $12,000 if married filing jointly; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2009             
12. Subtract line 11 from line 10. If zero or less, enter -0-             
13. Enter the smaller of line 10 or line 11             
14. Enter one-half of line 13             
15. Enter the smaller of line 2 or line 14             
16. Multiply line 12 by 85% (.85). If line 12 is zero, enter -0-             
17. Add lines 15 and 16             
18. Multiply line 1 by 85% (.85)             
19. Taxable benefits. Enter the smaller of line 17 or line 18. Also enter this amount on Form 1040, line 20b, or Form 1040A, line 14b             
taxmap/pub17/p17-060.htm#en_us_publink1000171931

Example 3.(p85)

Joe and Betty Johnson file a joint return on Form 1040 for 2009. Joe is a retired railroad worker and in 2009 received the social security equivalent benefit (SSEB) portion of tier 1 railroad retirement benefits. Joe's Form RRB-1099 shows $10,000 in box 5. Betty is a retired government worker and receives a fully taxable pension of $38,000. They had $2,300 in taxable interest income plus interest of $200 on a qualified U.S. savings bond. The savings bond interest qualified for the exclusion. They figure their taxable benefits by completing Worksheet 1. On line 3 of the worksheet, they enter $40,300 ($38,000 + $2,300).
Worksheet 1.
Figuring Your Taxable Benefits
1. Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099. Also enter this amount on Form 1040, line 20a, or Form 1040A, line 14a $10,000
2. Enter one-half of line 1 5,000
3. Enter the total of the amounts from: 
  Form 1040: Lines 7, 8a, 9a, 10 through 14, 15b, 16b, 17 through 19, and 21. 
  Form 1040A: Lines 7, 8a, 9a, 10, 11b, 12b, and 13 40,300
4. Enter the amount, if any, from Form 1040 or 1040A, line 8b -0-
5. Form 1040 filers: Enter the total of any exclusions/adjustments for: 
 
  • Qualified U.S. savings bond
    interest (Form 8815, line 14),
  • Adoption benefits (Form 8839, line
    30),
  • Foreign earned income or housing
    (Form 2555, lines 45 and 50, or
    Form 2555-EZ, line 18), and
  • Certain income of bona fide
    residents of American
    Samoa (Form 4563, line 15)
    or Puerto Rico
 
  Form 1040A filers: Enter the total of any exclusions for qualified U.S. savings bond interest (Form 8815, line 14) or for adoption benefits (Form 8839, line 30) 200
6. Add lines 2, 3, 4, and 5 45,500
7. Form 1040 filers: Enter the amount from Form 1040, lines 23 through 32, and any write-in adjustments you entered on the dotted line next to line 36. 
  Form 1040A filers: Enter the amount from Form 1040A, lines 16 and 17 -0-
8. Is the amount on line 7 less than the amount on line 6? 
  No. Stop None of your benefits are taxable. Enter -0- on Form 1040, line 20b, or Form 1040A, line 14b.
  Yes.  Subtract line 7 from line 6 45,500
9. If you are:
  • Married filing jointly, enter $32,000
  • Single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2009, enter $25,000
32,000
  Note. If you are married filing separately and you lived with your spouse at any time in 2009, skip lines 9 through 16; multiply line 8 by 85% (.85) and enter the result on line 17. Then go to line 18. 
10. Is the amount on line 9 less than the amount on line 8? 
  No. Stop None of your benefits are taxable. Enter -0- on Form 1040, line 20b, or on Form 1040A, line 14b. If you are married filing separately and you lived apart from your spouse for all of 2009, be sure you entered "D" to the right of the word "benefits" on Form 1040, line 20a, or on Form 1040A, line 14a. 
  Yes.  Subtract line 9 from line 8 13,500
11. Enter $12,000 if married filing jointly; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2009 12,000
12. Subtract line 11 from line 10. If zero or less, enter -0- 1,500
13. Enter the smaller of line 10 or line 11 12,000
14. Enter one-half of line 13 6,000
15. Enter the smaller of line 2 or line 14 5,000
16. Multiply line 12 by 85% (.85). If line 12 is zero, enter -0- 1,275
17. Add lines 15 and 16 6,275
18. Multiply line 1 by 85% (.85) 8,500
19. Taxable benefits. Enter the smaller of line 17 or line 18. Also enter this amount on Form 1040, line 20b, or Form 1040A, line 14b $6,275
More than 50% of Joe's net benefits are taxable because the income on line 8 of the worksheet ($45,500) is more than $44,000. Joe and Betty enter $10,000 on Form 1040, line 20a, and $6,275 on Form 1040, line 20b.