In: Accounting
What is the tax consequence and correct deduction for this scenario. Where on the tax draft forms does this deduction go?
The Schnappaufs incur the following medical expenses (before considering the $700 reimbursement they receive from their health insurance policy):
medical premiums 3800
doctors 1200
chiropractor 650
dentist 1900
vet fees (family dog sandy) 350
prescription drugs 340 over the counter drugs (aspirin, cough syrup) 175.
In addition, Bill purchases an Exsoaligner machine for $700. The machine was recommended by the chiropractor to help strengthen Bill's back muscles.
Medical expenses that are deductible by for yourself,spouse and your dependents are that exceeding 7.5% of the adjusted gross income.
Medical expenses deductible for the year 2018 are as below,
Total Deductions available = $8590
Reimbursement received from health insurance policy = $700
Net deductions available = $7890
Expenses that are not deductible are,
Schedule A of Form1040:-
Total deductions amount is shown in Line 1 of Schedule A and adjusted gross income in line 2
Enter 7.5% of adjusted gross income in line 3
Difference between Line 1 and Line 3 is entered in Line 4.