Question

Megan is single, 45 years old, and has an adjusted gross income of 70,000 for the tax year. She had the following medical expenses: prescriptions:1,480, doctor copays: 950, dental bills:2,800, elective tummy tuck surgery: 6,500, health insurance premiums (after tax):1,800. What is the amount of allowable medical and dental expenses Megan can report on Schedule A (Form 1040), line 4?

Answer 1

Megan can deduct $1,780 of her medical and dental expenses on her taxes, excluding the cost of her elective tummy tuck surgery since only expenses above 7.5% of her adjusted gross income are deductible.

Step-by-step explanation:

Megan has various medical and dental expenses that she may be able to deduct on her taxes. Not all expenses qualify for a deduction. The Internal Revenue Service (IRS) allows you to deduct the amount of your medical and dental expenses that exceed 7.5% of your adjusted gross income on Schedule A (Form 1040), line 4.

First, we need to determine which of Megan's expenses are qualified medical expenses. The elective tummy tuck surgery is not considered a qualified medical expense because it is cosmetic. This leaves us with the prescriptions ($1,480), doctor copays ($950), dental bills ($2,800), and health insurance premiums ($1,800) as potentially deductible. The total of these expenses is $7,030 ($1,480 + $950 + $2,800 + $1,800).

Megan's adjustable gross income (AGI) is $70,000. So, 7.5% of her AGI is $5,250 ($70,000 * 0.075). To calculate her allowable deductions, we subtract this amount from her total qualified expenses. Therefore, Megan can report $1,780 ($7,030 - $5,250) of allowable medical and dental expenses on Schedule A (Form 1040), line 4.

Answer 2

Megan can report $6,230 as an itemized deduction on Schedule A, line 4.

Step-by-step explanation:

To determine the amount of allowable medical and dental expenses Megan can report on Schedule A (Form 1040), line 4, we need to consider the tax rules. According to the tax code, medical and dental expenses can be reported as an itemized deduction if they exceed a certain percentage of the adjusted gross income (AGI).

In Megan's case, her AGI is $70,000. The eligible medical expenses include prescriptions ($1,480), doctor copays ($950), dental bills ($2,800), and health insurance premiums after tax ($1,800). However, the elective tummy tuck surgery is not an eligible medical expense for tax purposes.

To calculate the allowable amount, we need to determine Megan's threshold. For taxpayers under the age of 65, the threshold is 7.5% of the AGI. So, in this case, 7.5% of $70,000 is $5,250. Since Megan's total eligible medical and dental expenses ($6,230) exceed this threshold, she can report $6,230 as an itemized deduction on Schedule A, line 4.