Income – Social Security Benefits

Check your understanding of Social Security benefits. Read the following scenario and indicate whether each of the statements below is true or false by clicking on the correct answer. When you are finished, click the Check My Answers button at the bottom of the page.

Hank comes to your site for help with his tax return. He is upset because his neighbor told him that he would have to pay tax on all of his Social Security benefits this year. After talking to Hank, you learn that his wife died several years ago.

This tax year, he sold all of his stock and moved into senior housing. Hank received $31,896 of taxable income from the sale of the stock. His neighbor told him, with that much income, the entire $11,724 of his Social Security benefits would be taxable.

1. Hank's neighbor is correct; all of Hank's Social Security benefits are taxable.

• A. True Incorrect. The correct answer is False.
• B. False Correct.No answer given. The correct answer is False.

2. The maximum taxable amount of Hank's benefits is 85%.

• A. True Correct.No answer given. The correct answer is True.
• B. False Incorrect. The correct answer is True.

3. The Social Security Benefits Worksheet is used to calculate the taxable portion of Hank's benefits.

• A. True Correct.No answer given. The correct answer is True.
• B. False Incorrect. The correct answer is True.

4. If Hank had not sold his stock and had no other source of income other than Social Security, his benefits may not be taxable.

• A. True Correct.No answer given. The correct answer is True.
• B. False Incorrect. The correct answer is True.