Chad is divorced and has custody of Brett, his 14-year old son. Chad’s ex-wife has custody...

Chad is divorced and has custody of Brett, his 14-year old son. Chad’s ex-wife has custody of their daughter, Sara. During the year, Chad incurs $3,000 for orthodontic work for Sara to correct a severe overbite and $2,000 in unreimbursed medical expenses associated with Brett’s broken leg. Chad also pays $900 in health insurance premiums, which is withheld from is paycheck on a pre-tax basis. Both Brett and Sara are covered under Chad’s medical insurance plan. In addition, Chad incurs $400 for prescription drugs and $1,000 in doctor bills for himself. Chad’s AGI is $40,000. What is Chad’s medical expense deduction for the year assuming that his other itemized deductions exceed the standard deduction?

2019 Tax Year.

Expert Solution

Total medical expenses = Orthodontic work + Unreimbursed medical expenses + Prescription drugs + Doctor bills = $3,000 + $2,000 + $400 + $1,000 = $6,400

AGI = $40,000

10% of AGI = $40,000 * 10% = $4,000

Medical Expense deduction = Total medical expenses - 10% of AGI = $6,400 - $4,000 = $2,400

Chad’s medical expense deduction for the year assuming that his other itemized deductions exceed the standard deduction is $2,400.

* Pre-tax health insurance premiums are not included. After tax would be included.

ekkarill92 answered 2 years ago

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