Col. Lancaster is a CPA in the Navy. His AGI for 2015 is $126,000. His daughter,
ID: 2497196 • Letter: C
Question
Col. Lancaster is a CPA in the Navy. His AGI for 2015 is $126,000. His daughter, Suzie, and her husband, Dick, live with him as his dependents but they do file a joint return. Lancaster's medical insurance policy does not cover them.
Lancaster incurred $5,300 in medical insurance premiums for the year. He also paid:
Dental bills for Dick's parents: $6,200
Doctor bills for Dick: 5,100
Prescribed medicines for Dick: 830
Nonprescribed insulin for Dick: 960
Col. Lancaster also incurred medical expenses for himself in the amount of $5,200. He filed a claim and received $4,800 from the insurance company in January, 2016.
What is the amount of his medical expense deduction for the year as computed on Schedule A?
During 2015, he had AGI of $126,000. He also paid the following medical expenses:
Explanation / Answer
Col. Lancaster is a CPA in the Navy. His AGI for 2015 is $126,000. IRS allows you to deduct qualified medical expenses that exceeds 10% of your AGI for the year. All medical expenses over and above $12,600 (i.e. 10% of $126,000) qualifies for medical expenses for the year as computed on Schedule A.
So, medical expenses of Col. Lancaster was $18290 and he received $4,800 towards medical expenses by the Insurance company, that was in January, 2016.
The amount of his medical expense deduction for the year as computed
on Schedule A are ($18,290 - $12,600) = $5,690