You're reading it wrong. Half your SS is just part of the test to see if any of your SS is taxable.
Social security(SS) only
becomes taxable when added to sufficient other income. If you are
otherwise required to file a tax return, you do need to enter it in Turbotax
(TT). TT will determine the taxable portion.
Social security (including SSDI) becomes taxable when your income,
including 1/2 your social security, reaches:
Married Filing Jointly(MFJ): $32,000
Single or head of household: $25,000
Married Filing Separately and lived with your spouse at any
time during the tax year: $0
Once you pass those thresholds, For the first $9,000 (12,000 MFJ), only 50% of your SS is
taxed. After that 85% is taxed. And gradually the 50% taxed is
replaced with the 85%. It's the government; they make it complicated. See IRS
Publication 915. When TT prints out your return, it will provide you with
the IRS social security worksheet
showing you how the taxable amount was calculated. Here’s a copy showing you how the calculation
is done:
http://apps.irs.gov/app/vita/content/globalmedia/social_security_benefits_worksheet_1040i.pdf
If your use form 1040A, instead of 1040, see http://taxtopics.net/ssatax.pdf
After TurboTax (TT)
calculates the taxable portion of SS, it puts the total amount of SS on line
20a of form 1040 and the taxable amount on line 20b (lines 14a&b of form
1040A). TT also produces a worksheet to
show how the taxable amount is calculated. Although most people pay tax on 85%
of their SS. it can be less for lower income taxpayers.
