Try the fastest way to create flashcards
Question

The Kivetsky family had an adjusted gross income of $119,245.61. They included medical deductions on Schedule A. They had$14,191 in medical expenses. Medical insurance covered 80% of these expenses. The IRS allows medical and dental expenses deductions for the amount that exceeds 10% of a taxpayer's adjusted gross income. How much can they claim as a medical deduction?

Solution

Verified
Step 1
1 of 2

The Kivetsky family had an adjusted gross income of $119,254.61\$119,254.61.

They had $14,191\$14,191 in medical expenses. Medical insurance covered 80% of these expenses.

Therefore, they paid $2,838.20\$2,838.20 out-of-pocket for medical expenses.

The IRS allows medical deductions for the amount that exceeds 10% of a taxpayer's adjusted gross income.

10% of their adjusted gross income is equivalent to $11,924.56\$11,924.56.

Because their out-of-pocket medical expenses were less than 10% of their adjusted gross income, they can not claim any amount as a medical deduction ($0\$0).

Medical expenses paid out-of-pocket\textbf{Medical expenses paid out-of-pocket}:

$14,191.20=$2,838.20\$14,191 \cdot .20 = \$2,838.20

10% of adjusted gross income\textbf{10\% of adjusted gross income}:

$119,245.61.10=$11,924.56\$119,245.61 \cdot .10 = \$11,924.56

$2,838.20<$11,924.56\$2,838.20<\$11,924.56

Create a free account to view solutions

Create a free account to view solutions

Recommended textbook solutions

Financial Algebra 1st Edition by Richard Sgroi, Robert Gerver

Financial Algebra

1st EditionISBN: 9780538449670 (1 more)Richard Sgroi, Robert Gerver
2,606 solutions
Financial Algebra, Workbook 1st Edition by Richard Sgroi, Robert Gerver

Financial Algebra, Workbook

1st EditionISBN: 9780538449700Richard Sgroi, Robert Gerver
773 solutions
Financial Algebra: Advanced Algebra with Financial Applications 2nd Edition by Richard Sgroi, Robert Gerver

Financial Algebra: Advanced Algebra with Financial Applications

2nd EditionISBN: 9781337271790Richard Sgroi, Robert Gerver
3,016 solutions
Practice Problems for Financial Algebra: Advanced Algebra with Financial Applications 2nd Edition by Robert Gerver

Practice Problems for Financial Algebra: Advanced Algebra with Financial Applications

2nd EditionISBN: 9781337271820Robert Gerver
898 solutions

More related questions

1/4

1/7