Question

The deduction for medical expenses is limited to the amount of unreimbursed qualifying medical expenses paid during the year reduced by two percent of the taxpayer's AGI. What is the limit for the deduction of medical expenses?

1) 10% of AGI
2) 2% of AGI
3) 5% of AGI
4) 15% of AGI

Answer 1

The limit for the deduction of medical expenses is 10% of AGI for most taxpayers, but temporarily set at 7.5% for taxpayers who are 65 or older.

Step-by-step explanation:

The limit for the deduction of medical expenses is 10% of AGI for most taxpayers. However, for taxpayers who are 65 years of age or older, the limit is temporarily set at 7.5% of AGI until December 31, 2020. This means that you can only deduct medical expenses that exceed either 10% or 7.5% of your AGI, depending on your age.

For example, if your AGI is $50,000 and you are under 65 years of age, you can only deduct medical expenses that exceed $5,000 (10% of $50,000). If you are 65 years of age or older, you can deduct medical expenses that exceed $3,750 (7.5% of $50,000).