Merle is a widow,age 80 and blind,who is claimed as a dependent by her son.During 2014,she received $4,800 in Social Security benefits,$2,500 in bank interest,and $1,800 in cash dividends from stocks.Merle's taxable income is:
A)$4,300 - $1,000 - $3,100 = $200.
B)$4,300 - $3,100 = $1,200.
C)$4,300 - $1,000 - $1,550 = $1,750.
D)$9,100 - $1,000 - $3,100 = $5,000.
E)None of these.

Question

Quizplus · Accepted Answer

Although Merle has no earned income,she is entitled to a minimum regular standard deduction of $1,000.She also is allowed additional standard deductions for age and blindness of $3,100 ($1,550 + $1,550).At this level of income,the Social Security benefits are a nontaxable exclusion.

Merle Is a Widow,age 80 and Blind,who Is Claimed as a Dependent