Question

Aaron (77) and Julie (73) are retired, married filing jointly taxpayers who paid $9,483 in qualified medical and dental expenses. Their AGI is $52,792. If they were to itemize on Schedule A (Form 1040), how much is their deduction for medical and dental expenses?

A) $3,959
B) $4,204
C) $5,524
D) $9,483

Answer 1

Aaron and Julie can deduct medical and dental expenses that exceed 7.5% of their AGI. With expenses of $9,483 and an AGI of $52,792, their deduction is $5,524.

Step-by-step explanation:

The question relates to determining the allowable amount for medical and dental expenses deduction when filing a tax return on Schedule A (Form 1040). For Aaron and Julie, who are retired and married filing jointly, the deduction is calculated as the amount of qualified expenses that exceed 7.5% of their adjusted gross income (AGI). With qualified expenses of $9,483 and an AGI of $52,792, we calculate 7.5% of AGI as $52,792 * 0.075 = $3,959.4. The amount that exceeds this threshold is $9,483 - $3,959.4 = $5,523.6. Therefore, the correct answer is C) $5,524 (rounded to the nearest dollar).