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That makes his final adjusted revenues $57,058 ($39,000 plus $18,058). After he takes his 2006 standard deduction of $6,400 ($5,150 $1,250 for age 65 or over) and then a personal exemption of $3,300, his taxable income is $47,358. That puts him in the 25% marginal tax bracket. If Hank's income comes up by $10 of taxable income he pays off $2.50 in taxes on that $10 plus $2.13 in tax on the additional $8.50 of Social Security benefits will certainly become taxable.

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