Bob Adams is 42 years old. He deducted medical expenses on his U. S. individual
ID: 2420236 • Letter: B
Question
Bob Adams is 42 years old. He deducted medical expenses on his U. S. individual income tax return for 2014. For tax year 2014, his total medical expenses exceeded the 10-percent floor based on adjusted gross income by $4,750. His total itemized deductions for tax year 2014 exceeded the standard deduction he otherwise could have claimed by $8,624.
In 2015, he received an unexpected reimbursement from his health insurance company of $8,890 for medical expenses he paid in 2014 and deducted on his U. S. individual income tax return for 2014. How much of this $8,890 reimbursement must he include in his gross income for 2015? Explain. Show all calculations
Explanation / Answer
Total amount of Medical Expenses $8624
Less 10% of Medical expenses already deducted $4750= $475
Amoutn included in Gross income = $8624-$475 = $8149.
# Generally Medical expenses which are more than 10% of adjusted gross income can be deducted from Gros income subject to standard deduction limit.
# Medical expenses included only those amount by which it was not reimbursed.
## in case of excess reimbursement , the excess amount shoud be included in gross income.