Ben is a college student and is subject to social security taxa all taxpayer as all young taxpayer. Ben was hospitalized for back problems. While he was away from the job, he collected his regular salary from an employersponsored income protection insurance policy. Bens employersponsored hospitalization insurance policy also paid for 90% of his medical expenses. Ben also collected on an income protection policy that he purchased.

Since Ben is subject to the social security tax, he was very surprise to know that under the formula for taxing social security benefits, low income taxpayers are not required to include any of the Social Security benefits in gross income. But as income increases, 50% of the Social Security benefits may be included in gross income. Further increases in income will cause as much as 85% of the Social Security benefits being subject to tax.

Which of the above sources of income are taxable? Explain the basis for excluding any item or items. What Federal income tax benefits are provided for college students?

How does the taxation of Social Security benefits differ from the taxation of an annuity purchased by the taxpayer? Do you think that the taxation of Social Security benefits is more or less progressive than the taxation of other types of income?

At least 250 words