Seamus is employed as a corporate attorney. In 2019 he had AGI of $57,000 and paid...

Seamus is employed as a corporate attorney. In 2019 he had AGI of $57,000 and paid the following medical expenses.

Medical insurance premiums (withheld on a pretax basis) $4,700
Doctor and dentist bills for Dave and Elaine (Seamus’ parents) $6,800
Doctor and dentist bills for Seamus. $5,200
Prescription medicines for Seamus $400
Weight loss treatment related to obesity $600
Nonprescription insulin for Seamus $850
Low Dose Aspirin prescribed by Seamus’ doctor bought over the counter $225

Dave and Elaine would qualify as Seamus’ dependents except they file a join return. Seamus’ medical insurance policy does not cover them. Seamus does not expect to receive any reimbursements for the medical expenses identified in this list. Assuming Seamus has $8,000 of other eligible itemized deductions, what is Seamus’ tax benefit related to his maximum allowable medical expense deduction for 2019?

Solutions

Expert Solution

Allowable Medical Expenses for 2019 -

Medical insurance premiums $4,700 - is an allowed medical expense

Doctor and dentist bills for Dave and Elaine (Seamus parents) $6,800 - Seamus parents are filing their own tax return so Seamus is not allowed to take the deduction.

Doctor and dentist bills for Seamus. $5,200 - Allowed as a medical expense

Prescription medicines for Seamus $400 - allowed as a medical expense

Weight loss treatment related to obesity $600 - not allowed as a medical expense, if the expense is related to any illness then it is allowed.

Nonprescription insulin for Seamus $850 - allowed as a medical expense - insulin is allowed even with nonprescription.

Low Dose Aspirin prescribed by Seamus’ doctor bought over the counter $225 - not allowed, in general, whatever taken through OTC is not allowable even if a doctor recommends purchasing them.

1. Medical and dental expense $850+400+5200+4700 $11,150

2. Enter amount from Form 1040 - AGI $57,000

3. Multiply line 2 by 7.5% - 57,000*7.5% 4,275

4. Subtract line 3 from line 1 $6,875 - allowable medical expense.

ekkarill92 answered 1 year ago

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