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Appendix B. (Continued) Keep for Your Records Comprehensive Example Determining Your Traditional IRA Deduction and the Taxable Portion of Your Social Security Benefits John Black is married and files a joint return. He is 65 years old and had 2018 wages of $90,500. His wife didn’t work in 2018. He also received social security benefits of $12,000 and made a $6,000 contribution to his traditional IRA for the year. He had no foreign income, no tax-exempt interest, and no adjustments to income on lines 23 through 36 on his Schedule 1 (Form 1040). He participated in a section 401(k) retirement plan at work. John completes Worksheets 1 and 2. Worksheet 2 shows that his 2018 IRA deduction is $5,950. He must either withdraw the contributions that are more than the deduction (the $50 shown on line 8 of Worksheet 2), or treat the excess amounts as nondeductible contributions (in which case he must complete Form 8606 and attach it to his Form 1040). The completed worksheets that follow show how John figured his modified AGI to determine the IRA deduction and the taxable social security benefits to report on his Form 1040. Worksheet 1 Computation of Modified AGI (For use only by taxpayers who receive social security benefits) Filing Status—Check only one box:

A. Married filing jointly B. Single, Head of Household, Qualifying Widow(er), or Married filing separately and lived apart from your spouse during the entire year C. Married filing separately and lived with your spouse at any time during the year 1. Adjusted gross income (AGI) from Form 1040 (For purposes of this worksheet, figure your AGI without taking into account any social security benefits from Form SSA-1099 or RRB-1099, any deduction for contributions to a traditional IRA, any student loan interest deduction, any domestic production activities deduction or, or any exclusion of interest from savings bonds to be reported on Form 8815.) . . . . . . . . . . . . . . . 1. 90,500 2. Enter the amount in box 5 of all Forms SSA-1099 and Forms RRB-1099 . . . . . . . . . . . . . . . . . . 2. 12,000 3. Enter one-half of line 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. 6,000 4. Enter the amount of any foreign earned income exclusion, foreign housing exclusion, U.S. possessions income exclusion, exclusion of income from Puerto Rico you claimed as a bona fide resident of Puerto Rico, or exclusion of employer-provided adoption benefits . . . . . . . . . . 4. 0 5. Enter the amount of any tax-exempt interest reported on Form 1040, line 2a . . . . . . . . . . . . . . . 5. 0 6. Add lines 1, 3, 4, and 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6. 96,500 7. Enter the amount listed below for your filing status. • $32,000 if you checked box A above. • $25,000 if you checked box B above. • $0 if you checked box C above. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7. 32,000 8. Subtract line 7 from line 6. If zero or less, enter -0- on this line . . . . . . . . . . . . . . . . . . . . . . . . . . . 8. 64,500 9. If line 8 is zero, skip to line 17, enter -0-, and continue with line 18. If line 8 is more than zero, enter the amount listed below for your filing status. • $12,000 if you checked box A above. • $9,000 if you checked box B above. • $0 if you checked box C above . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . 9. 12,000 10. Subtract line 9 from line 8. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10. 52,500 11. Enter the smaller of line 8 or line 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11. 12,000 12. Enter one-half of line 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12. 6,000 13. Enter the smaller of line 3 or line 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13. 6,000 14. Multiply line 10 by 0.85. If line 10 is zero, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14. 44,625 15. Add lines 13 and 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15. 50,625 16. Multiply line 2 by 0.85 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16. 10,200 17. Taxable benefits to be included in modified AGI for traditional IRA deduction purposes. Enter the smaller of line 15 or line 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17. 10,200 18. Enter the amount of any employer-provided adoption benefits exclusion and any foreign earned income exclusion and foreign housing exclusion or deduction that you claimed . . . . . 18. 0 19. Modified AGI for determining your reduced traditional IRA deduction—add lines 1, 17, and 18. Enter here and on line 2 of Worksheet 2 next . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19. 100,700 Page 56 Publication 590-A (2018)