During 2018, Jill, age 39, participated in a Section 401(k) plan which provides for maximum employee contributions of 8%. Jill's salary was $91,600 for the year. Jill elects to make the maximum contribution.
What is Jill's maximum tax-deferred contribution to the plan for the year?
$___________
Linda installed a special pool for the hydrotherapeutic treatment of severe arthritis, as prescribed by her doctor. The cost of installing the pool was $20,000, and her insurance company paid $5,000 toward its cost. The pool increased the value of Linda's house by $7,000, and it has a useful life of 10 years.
How much of a deduction (before any AGI limitations) is Linda
entitled to in the year of installation of the pool?
$______________
Linda installed a special pool for the hydrotherapeutic treatment of severe arthritis, as prescribed by her doctor. The cost of installing the pool was $14,240, and her insurance company paid $3,560 toward its cost. The pool increased the value of Linda's house by $4,984, and it has a useful life of 10 years.
How much of a deduction (before any AGI limitations) is Linda
entitled to in the year of installation of the pool?
$________
Janet needs an elevator seat attached to her stairs since she has a medical condition that makes her unable to climb the stairs in her house. The $10,000 spent on the elevator seat does not increase the value of her house according to a local appraiser.
How much of the capital asset is deductible in Janet's tax return as a medical expense?
$__________ is deductible in the current year as an expense before the AGI limitation.
| 1 | Jill's maximum tax deferred contribution to the plan for the year | ||
| Salary | $91,600 | ||
| Maximum contribution | 8% | ||
| Maximum tax deferred contribution | $7,328 | ||
| 2 | How much deduction is Linda entitled to in the year of installation of the pool | ||
| Cost of installation of the pool | $20,000 | ||
| Less: reimbursement from Insurance | ($5,000) | ||
| Increase in value of house | ($7,000) | ||
| Deduction for which Linda is entitled | $8,000 | ||
| 3 | How much deduction is Linda entitled to in the year of installation of the pool | ||
| Cost of installation of the pool | $14,240 | ||
| Less: reimbursement from Insurance | ($3,560) | ||
| Increase in value of house | ($4,984) | ||
| Deduction for which Linda is entitled | $5,696 | ||
| 4 | How much of the capital asset is deductible in Janet's tax return as a medical | ||
| expense? | |||
| Cost of elevator seat | $10,000 | ||
| Less: Increase in Value | $0 | ||
| Deduction for which Janet is entitled | $10,000 | ||
During 2018, Jill, age 39, participated in a Section 401(k) plan which provides for maximum employee...
CASE FACTS Mike and Jane Cool are married and file a joint Federal income tax return. Both are under 50 years old. Mike’s social security number is 999-88-7777. Jane’s is 888-77-6666. They live at 234 Freedom Boulevard, Cedar City, UT 84720. Neither is interested in contributing to the Presidential Election Campaign. Mike is a city engineer. His W-2 showed wages of $85,000, Federal income tax withheld of $7,500 and state income tax withheld of $3,000. Mike does not participate in...
Gleim 6 Deductions from AGI [1] Which one of the following expenses does not qualify as a deductible medical expense? A. Cost of long-term care for a developmentally disabled person in a relative’s home. B. Special school for a deaf child to learn lip reading. C. Cost of elevator installed for individual who had heart bypass surgery (in excess of increase in value of individual’s home). D. Cost and care of guide dogs used by a blind person in his...