Question

Social Security retirement income beneficiaries who have significant incomes must include up to 85% of their Social Security benefits as income for federal income tax purposes. In regard to the taxation of Social Security retirement benefits, which of these statements are CORRECT?

I. The first threshold or base amount is $25,000 of provisional income for all single, unmarried taxpayers.
II. The first threshold or base amount is $32,000 of provisional income for married taxpayers filing jointly.
III. The second threshold or base amount is $34,000 of provisional income for all single (unmarried) taxpayers.
IV. The second threshold or base amount is $44,000 of provisional income for married taxpayers filing jointly.


A) I, II, III, and IV
B) III and IV
C) I, II, and III
D) I and II

Answer 1

The correct statements about the taxation of Social Security retirement benefits are that the first threshold is $25,000 for single taxpayers and $32,000 for married taxpayers filing jointly. These are the provisional income levels at which Social Security benefits start to become taxable.

Step-by-step explanation:

Regarding the taxation of Social Security retirement benefits, the correct statements concerning the thresholds or base amounts for including Social Security benefits as income for federal tax purposes are:

• The first threshold or base amount is $25,000 of provisional income for all single, unmarried taxpayers.
• The first threshold or base amount for married taxpayers filing jointly is $32,000 of provisional income.

These income thresholds are critical for retirees to understand, as they determine the extent to which Social Security benefits are taxable. With millions of retirees depending on Social Security for a significant portion of their income, it is important to be aware of the potential tax implications, especially as this can impact their overall financial planning during retirement.