Question

Debbie is age 67 and unmarried. Her only sources of income are $200,000 in taxable interest and $20,000 of Social Security benefits. Debbie's adjusted gross income for the year is: a.$203,000. b.$200,000. c.$220,000. d.$217,000.

Answer 1

Answer: d.$217,000.

Step-by-step explanation:

Current tax laws require that 85% of Social Security Benefits be included as AGI for the year.

Debbie's Adjusted Gross Income (AGI) for the year is therefore:

= Taxable interest income + 85% of Social Security

= 200,000 + 20,000 * 85%

= 200,000 + 17,000

= $217,000