Final answer:
Paul's qualifying medical expenses for 2021 amount to $11,250, which includes doctor and hospital bills, prescribed medicines, and certain costs related to the dust elimination system. After accounting for the AGI threshold, his medical expense deduction for the year would be $7,500.
Step-by-step explanation:
The determination of Paul's qualifying medical expenses for 2021 includes the doctor and hospital bills, the prescribed medicines, and certain costs associated with the dust elimination system installed in his personal residence. To calculate the medical expenses deduction, one must consider only the expenses that exceed 7.5% of AGI.
The total of Paul's qualifying medical expenses for 2021 would be:
- Doctor and hospital bills: $4,500
- Prescribed medicines: $750
- Deductible portion of dust elimination system cost: $6,000 (since it increased the value of the residence by $6,000, only the excess cost is deductible)
The increase in utility bills is not a qualifying expense, and neither is the cost of the appraisal.
Thus, the total is $4,500 + $750 + $6,000 = $11,250.
Paul's medical expense deduction for 2021 would be:
Total qualifying expenses $11,250 - (AGI $50,000 x 7.5%) = $11,250 - $3,750 = $7,500.