Final answer:
The statement is false; taxpayers can claim medical expenses that exceed 7.5% of their adjusted gross income as an itemized deduction on Schedule A.
Step-by-step explanation:
The statement that all taxpayers must have medical expenses less than 7.5% of adjusted gross income to claim the excess on Schedule A is false. The IRS allows taxpayers to deduct medical expenses that exceed 7.5% of their adjusted gross income. Once medical expenses surpass this threshold, only the amount that exceeds 7.5% can be claimed as an itemized deduction on Schedule A.For instance, if a taxpayer has an adjusted gross income of $50,000 and medical expenses totaling $5,000, the threshold for this taxpayer would be $3,750 (7.5% of $50,000).
Therefore, they can only claim the portion of the medical expenses that exceeds this amount, which would be $1,250 ($5,000 - $3,750).The U.S. tax code, including the regulations surrounding medical deductions, can be complex. Various deductions such as medical expenses, standard deductions, and exemptions can have significant impacts on one's taxable income. The Affordable Care Act (ACA) introduced additional considerations, like increased Medicare taxes for high-income earners as part of how it is funded.