The goal is to arrive at a "combined income" to see if you exceed the $32K annual combined and expose 50% of the SS benefits to tax.
Example.
$20K — Business net income (after expenses)
$14K — wife's employment
$25K — my social security
$10K — her social security
AGI calculation:
$20K business + $14K employment, less $1,500 (1/2 of SS taxes paid) = $32.5K
If I can take the standard deduction and personal exemptions here ($24,850), it reduces my AGI to $7,650.
Half my social security added ($12.5K) plus 100% of her social security ($10K) totals $22.5K.
$7,650 + $22.5K = just over $30K and under the threshold of $32K.
So two questions...
1. Is this calculation correct or did I do it wrong?
2. Is her social security added to the calculation at 50%, like mine, or at 100%?
Thanks.
