Question

Julio and maria gomez are retired, over 66 years old, and they live at 567 ono way, cambria, ca 94457. julio's social security number is 777-88-5555 and maria's is 666-88-4444. julio received social security retirement benefits of $28,400 and maria received social security retirement benefits of $22,858. in addition, maria received a pension form the state of california in the amount of $16,752, and she had $3500 withheld for federal taxes ( include this on page 2 of form 1040 as a credit towards the tax liability). julio and maria also have a savings account with wells fargo bank and they earned $4200 in interest income. julio and maria own and live in their own home but do not pay a mortgage because they have paid it completely prior to retiring. their property taxes are very low and their medical expenses as well so they do not itemize deductions. julio and maria have a rental and need to include the income on their tax returns. they received $36000 in rents and had the following expenses for their rental which is located in cambria, ca. property taxes $3400 utilities $1200 repairs $5478 depreciation $1234. prepare their 2022 tax return. include forms 1040sr, schedule 1, and schedules b and e. only part of their social security retirement benefits are taxable.

In preparing their 2022 tax return, which of the following is true regarding Julio and Maria Gomez's social security retirement benefits?

a) Julio's benefits are fully taxable, while Maria's are tax-free.
b) Only a portion of Maria's benefits are taxable.
c) Both Julio and Maria's benefits are tax-free.
d) All of Julio and Maria's benefits are fully taxable.

Answer 1

B) Only a portion of Maria's Social Security benefits are taxable. Social Security benefits for retirees may be partially taxed depending on other income sources.

Step-by-step explanation:

In preparing the 2022 tax return for Julio and Maria Gomez, the correct answer regarding their social security retirement benefits is that only a portion of Maria's benefits are taxable.

This is because Social Security benefits for retirees are partially taxed depending on other incomes that the beneficiaries may have, like pensions, wages, and interest.

Which could make a part of the Social Security benefits taxable. Thus, the correct choice is b) Only a portion of Maria's benefits are taxable.

For many Americans, Social Security benefits are a crucial part of their retirement income, but not all of the benefits are always taxable.

The taxation of benefits depends on the retirees' total income and marital status. Moreover, the benefits may become more significant as individuals age due to increased healthcare costs and the depletion of their other savings.