Question

Jon, age 45, had adjusted gross income of $26,000 in 2014. During the year, he incurred and paid the following medical expenses:Drugs and medicines prescribed by doctors $ 300Health insurance premiums $ 750Doctors' fees $2,250Eyeglasses $ 75Jon received $900 in 2014 as a reimbursement for a portion of the doctors' fees. If Jon were to itemize his deductions, what would be his allowable medical expense deduction after the adjusted gross income limitation is taken into account?a. $0b. $425c. $600d. $1,000e. None of the above

Answer 1

a. $0

Step-by-step explanation:

In this question, first, we have to compute the deduction which is allowed and the total amount after receiving the reimbursement amount

So, the deduction would be equal to

= Adjusted gross income × Prescribed percentage

= $26,000 × 10%

= $2,600

And, the total amount = Drugs + Health insurance premiums + Doctor fees + Eyeglasses - reimbursement amount

= $300 + $750 + $2,250 + $75 - $900

= $2,475

Since the expenses are less than the 10% of adjusted gross income, so no amount would be deducted into account