Question

Simpson, age 45, is a single individual who is employed full time by Duff Corporation. This year Simpson reports AGI of $40,000 and has incurred the following medical expenses:

Dentist charges	$	1,315
Physician's charges		2,015
Optical charges		745
Cost of eyeglasses		450
Hospital charges		2,290
Prescription drugs		220
Over-the-counter drugs		795
Medical insurance premiums (not through an exchange)		860

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 $245 of the physician's charges and $1,690 for the hospital costs. Calculate the amount of medical expenses that will be included with Simpson’s itemized deductions after any applicable limitations.

Answer 1

Account	a	b
Dentist	1,315	1,315
Physician	2,015	1,770
Optical	745	745
Eyeglass	450	450
Hospital charge	2,290	600
Prescription drugs	220	220
OTC drugs	-	-
Medical insurance	860	860
Eligible expenses	7,895	5,960
Less: 7.5% of AGI	(3,000)	(3,000)
Deduction after limits	4,895	2,960

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