ITEM SET 15: TAXATION OF SOCIAL SECURITY BENEFITS benefits in 2016 at age 67 and are living off their benefits and a small amount ($1,050) of municipal bond Tim and Tammy are the same age and have greatly enjoyed their life. They began taking Social Security interest. They have been able to save money in an IRA which they have contributed to over the years. The 1. Assuming their combined Social Security benefits are $36,500 in 2021, how much of their Social Security benefit is taxable? How much federal income tax do they have for 2021? Only consider their municipal bond income and their Social Security. balance at the end of 2020 was $640,000. combined income - Adjusted gross income + non taxable interest + 1/2 of social security benefits 2. Assume the same facts as in question 1, but also assume that Tammy took a job making $21,000 for 2021. They do not need the money, but Tammy wanted to help out and get out of the house. How much of their Social Security benefit is taxable? How much federal income tax do they have for 2021