[The following information applies to the questions displayed below.] Simpson is

Question

[The following information applies to the questions displayed below.]

Simpson is a single individual who is employed full-time by Duff Corporation. This year Simpson reports AGI of $46,000 and has incurred the following medical expenses:

a. Calculate the amount of medical expenses that will be included with Simpson’s itemized deductions after any applicable limitations.

b. Suppose that Simpson was reimbursed for $540 of the physician's charges and $1,480 for the hospital costs. Calculate the amount of medical expenses that will be included with Simpson’s itemized deductions after any applicable limitations

Dentist charges $ 1,185 Physician's charges 1,950 Optical charges 760 Cost of eyeglasses 490 Hospital charges 2,560 Prescription drugs 365 Over-the-counter drugs 940 Medical insurance premiums (not through an exchange) 965

Explanation / Answer

a. All expenses are qualified medical expenses except for the over-the-counter drugs. Hence, Simpson’s medical expense deduction is $8,275 less $3,450 (7.5 % x 46,000) = $4,825 and this amount is included with Simpson’s other itemized deductions.

b. Same as a. except Simpson’s medical expenses are first reduced by reimbursements $8,275 less $1,950 then reduced by the floor limit $3,450 (7.5 % x 46,000) = $2,875 and this amount is included with Simpson’s other itemized deductions.

Related Questions

Navigate

• Browse (All)
• Browse #
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.