Medical Expenses (LO 5.1) In 2015, Margaret and John Murphy (age 66 and 68, resp
ID: 2466152 • Letter: M
Question
Medical Expenses (LO 5.1) In 2015, Margaret and John Murphy (age 66 and 68, respectively) are married taxpayers who file a joint tax return with AGl of $26,500. During the year they incurred the following expenses: Medical insurance premiums $1,150 Premiums on an insurance policy that pays $100 per day for each day Margaret is hospitalized 300 Medical care lodging (two people, one night) 65 Hospital bills 2,200 Doctor bills 850 Dentist bills 175 Prescription drugs and medicines 340 Psychiatric care 310 In addition, they drove 78 miles for medical transportation, and their insurance company reimbursed them $900 for the above expenses. On the following segment of Schedule A of Form 1040, calculate the Murphy's medical expense deduction. Note: If required, round any amount to the nearest dollar. Caution. Do not include expenses reimbursed or paid by others. Medical and Dental Expenses
1 Medical and dental expenses (see instructions) . . . . . . . . . . . . .
2 Enter amount from Form 1040, line 38. . . . .
3.Multiply line 2 by 10% (.10). But if either you or your spouse was born before January 2, 1951, multiply line 2 by 7.5% (.075) instead
4 Subtract line 3 from line 1. If line 3 is more than line 1, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . .
Explanation / Answer
Answer-
Particulars
Amount
‘1. Medical and dental Expense ( See Note -1)
4,240
‘2. Adjusted Gross Income Form 1040, line 38
26,500
‘3 7.5 % of AGI ( 26,500 x 0.075)
1987.50
‘4 Subtract line 3 from line. If line 3 is more than line 1 then this subtraction result will be deductible otherwise 0 is deductible
0
Hence Eligible medical deduction
0
Note-1 Medical and Dental Expense Eligible for Calculation
Medical Insurance Premium
0
It is not eligible as policy is providing guaranteed amount of $ 100 per day during hospitalisation
Medical Care lodging
300
Eligible
Hospital bills
65
Eligible
Doctor Bills
2200
Eligible
Dentist Bills
850
Eligible
Prescription drugs and medicine
175
Eligible
Psychiatric care
340
Eligible
Medical transportation
310
Eligible
Total
4,240
Particulars
Amount
‘1. Medical and dental Expense ( See Note -1)
4,240
‘2. Adjusted Gross Income Form 1040, line 38
26,500
‘3 7.5 % of AGI ( 26,500 x 0.075)
1987.50
‘4 Subtract line 3 from line. If line 3 is more than line 1 then this subtraction result will be deductible otherwise 0 is deductible
0
Hence Eligible medical deduction
0