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In the explanation it says "Since his provisional income of $31,980 is below $34,000.." Where did the $34,000 come from?
Original Fast Forward Academy test bank question:
George Black is single and files Form 1040 for 2011. He received the following income in 2011:
Fully taxable pension $18,600
Wages from part-time job $ 9,400
Interest income $ 990
George also received social security benefits during 2011. Form SSA-1099 shows $5,980 in box 5, Net Benefits in 2011. How much of George's social security is taxable?
To determine the taxable amount of social security income, add one-half of SSA-1099 Box 5 to all other income ($2,990 + $28,990 = $31,980) and compare to the base amount ($25,000 for Single filers). Because the total exceeds the lower base, some of his benefit is taxable. Since his provisional income of $31,980 is below $34,000, only half of his benefit is taxable. This equals $2,990.
FFA EA Book Reference: CH 2 Gross Income
Subject: Other income (e.g., scholarships, fellowships, Social Security benefits, barter income, independent contractor income, hobby income, alimony, non-taxable combat pay, earned income vs non-earned income)
Correct Answer: D
Novice Level Question