Answer:
$1909.15
Explanation:
You want to know the allowed medical deduction if the taxpayer had adjusted gross income of $101,598, paid $8,009 for medical insurance, and had expenses of $3,800, of which 60% were paid by insurance.
Out-of-pocket
The total out-of-pocket medical expense includes the $8009 cost of insurance and the portion of medical expenses not covered:
(1 -0.60)·$3800 = $1520
Then the out-of-pocket medical costs were ...
$8009 +1520 = $9529
Threshold
The expense threshold is 7.5% of the adjusted gross income, so is ...
$101,598 · 0.075 = $7619.85
Deductible amount
The deductible amount is the amount by which expenses exceed the threshold:
$9529 -7619.85 = $1909.15
They can claim $1909.15 as a medical deduction.
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Additional comment
Likely the amount that goes on the tax form is $1909, as rounding to the nearest dollar is preferred.
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