Seeking to understand why Pralana is calculating my taxable portion of SS Income as shown in attached file.
SS Income = 51,384
Taxable Portion of SS Income = 20,447
Based on my AGI and Filing Status (MFJ), I am expecting to see the Taxable Portion of SS Income to be 85% of SS Income. In other words,
Taxable Portion of SS Income = 51,384 * 085 = 43,676
Does anyone have any insight as to why Pralana Online is calculating 20,447 ?
@elbo2022 Sure. The formula isn't simply SSI x .85. It's min(0.85*SSI, max(0,0.85 *(your combined income - 44,000)) + min(0.5*SSI, 0.5 *min(your combined income -32,000, 12,000))), where your combined income = SSI/2 + other income. I think the thing you're missing is that the term for calculating your combined income actually only includes HALF of your SSI.
Stuart
@elbo2022 I suggest you go to Review > Reports > Tax Forms & Brackets and look at Pralana's tax forms for the scenario and year in question.
In particular, look at the Pub 915 Worksheet 'Figuring Your Taxable SSI Benefits' which replicates the IRS logic for determining taxable SSI. This will show you the step by step calculations.
