Question

Carlos incurs the following medical expenses during the current tax year: Surgeon's fees $2,000, Medical insurance premiums $600, Hospital fees $800, Prescription drugs $310, Wheel chair $200. Carlos's adjusted gross income for the year is $32,000. He receives a $500 reimbursement from his insurance company. Determine the amount of his medical expense deduction for the current year.

Answer 1

Carlos can deduct $1,510 as his medical expense deduction for the current year. Carlos can deduct $1,510 ($3,910 - $2,400) as his medical expense deduction for the current year.

Step-by-step explanation:

To determine the amount of Carlos's medical expense deduction for the current year, we need to calculate the total medical expenses and subtract any reimbursements received. The total medical expenses is the sum of the surgeon's fees ($2,000), medical insurance premiums ($600), hospital fees ($800), prescription drugs ($310), and the cost of the wheelchair ($200), which comes to $3,910.

Since Carlos's adjusted gross income is $32,000, we need to compute 7.5% of his adjusted gross income, which is $2,400. Any medical expenses exceeding this amount can be deducted. Therefore, Carlos can deduct $1,510 ($3,910 - $2,400) as his medical expense deduction for the current year.