Question

Required information l The following information applies to the questions displayed below.] Simpson, age 45, is a single individual who is employed full-time by Duff Corporation. This year Simpson reports AGI of $50,000 and has incurred the following medical expenses: Dentist charges Physician charges Optical charges Cost of eyeglasses Hospital charges Prescription drugs Over-the-counter drugs Medical insurance premiums (not $ 900 1,800 500 300 2,100 250 450 through an exchange) 775 a. Calculate the amount of medical expenses that will be included with Simpson's itemized deductions after any applicable limitations Medical expenses b. Suppose that Simpson was reimbursed for $250 of the physician's charges and $1,200 for the hospital costs. Calculate the amount of medical expenses that will be included with Simpson's itemized deductions after any applicable limitations. Medical expenses

Answer 1

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Answers is highlighted in yellow: Year 2018 & 2019 year is not mentioned, both 2018 & 2019 have been shown: Solution: $2,875 Answer: a) Explanation: Year 2018 Year 2019 900 $900 $ 1,800 1,800 $500 500 $300 300 $ 2,100 $ 2,100 $250 $ 250 Dentist Charges Physician charges Optical charges Cost of eyeglasses Hospital charges Prescription charges Over-the-counter drugs Medical insurance premium Allowable Expenses Less: Balance Floor-7.5% of AGI Simpson's medical expense deduction (Not allowed) $775 $ 775 $ 6,625 $ 6,625 Insurance reimbursement $6,625 $ 6,625 $ 3,750 $ 5,000 $ 2,875 1,625 50000*7.5% 50000*10% $ 1,425 Answer: b) Explanation: Year 2018 Year 2019 $ 6,625 $ 6,625 $ 1,450 $ 1,450 $ 5,175 $ 5,175 $ 3,750 $ 5,000 1,425 175 Simpson's Allowable medical expense Less: Balance Floor-7.5% of AGI Simpson's medical expense deduction Insurance reimbursement 250+1200 50000*7.5% 50000*10%