Jacob and Chloe are married and together have AGI of $30,000. They have two depe
ID: 2521785 • Letter: J
Question
Jacob and Chloe are married and together have AGI of $30,000. They have two dependents and file a joint return. Each pays $1,200 for hospitalization insurance. During the year, they paid the following amounts for medical care: $7,000 in doctor and dentist bills and hospital expenses, and $1,700 for prescribed medicine and drugs. In December, they received an insurance reimbursement of $2,700 for hospitalization. Determine the deduction allowable for medical expenses paid during the year.
a. $11,100.
b. $9,150.
c. $8,850.
d. $6,150.
e. None of the above.
PLEASE tell me how to get the answer! Thank you!
Explanation / Answer
Ans: d $6150, calculated as follows:
Allowable deductions: hospitalization insurance 2400 Doctor/dentist/hospital bills 7000 Prescribed medicines 1700 Total 11100 Less: Reimbursed by insurance company -2700 Net medical expense 8400 Less: 7.5% of AGI(0.075*30000) -2250 deduction allowable for medical expenses 6150
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