Simpson is a single individual who is employed full-time by Duff Corporation. Th
ID: 2540962 • Letter: S
Question
Simpson is a single individual who is employed full-time by Duff Corporation. This year Simpson reports AGI of $57,000 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 $640 of the physician's charges and $1,495 for the hospital costs. Calculate the amount of medical expenses that will be included with Simpson’s itemized deductions after any applicable limitations.Calculate how much Dan can deduct for taxes as an itemized deduction this year.
Calculate how much Dan can deduct for taxes as an itemized deduction this year.
Explanation / Answer
Answer
A.The amount of medical expenses that will be included with Simpson’s itemized deductions after any applicable limitations:
Note:Over-the-counter drugs (drugs purchased without a prescription) are not deductible expenses.
B.
Simpson was reimbursed for $640 of the physician's charges and $1,495 for the hospital costs.The amount of medical expenses that will be included with Simpson’s itemized deductions after any applicable limitations.
Particulars Amount Amount Dentist charges 1215 Physician's charges 2165 Optical charges 935 Cost of eyeglasses 660 Hospital charges 2300 Prescription drugs 455 Medical insurance premiums 1045 Total Medical expenses 8775 Less:10% of AGI(57000*10%) (5700) Medical expenses itemized deduction 3075