Question

Which of the following factors determines whether Social Security benefits received by a taxpayer are tax free?

a. The taxpayer's gender
b. Whether the benefits are survivor, disability or retirement benefits
c. The taxpayer's income from all sources
d. Whether the taxpayer has foreign earned income

Answer 1

The factor that determines whether Social Security benefits received by a taxpayer are tax free is the taxpayer's income from all sources.

Step-by-step explanation:

The factor that determines whether Social Security benefits received by a taxpayer are tax free is option c: the taxpayer's income from all sources. The amount of income a taxpayer receives from all sources, including Social Security benefits, determines whether they are subject to federal income tax. If the taxpayer's income is below a certain threshold, their Social Security benefits may be tax-free.

For example, if a taxpayer's income from all sources is below $25,000 for individuals or $32,000 for joint filers, their Social Security benefits are tax-free. However, if their income exceeds these thresholds, a portion of their benefits may be subject to taxation.

It's important for taxpayers to understand their specific situation and consult a tax professional or the IRS guidelines to determine the taxability of their Social Security benefits.