Question

Using 2019 IRS forms and the information below, William is 53 and Joyce is 51. They are married. William is a manager for ABC Corporation, a firm that manufactures and distributes widgets. Joyce is a self-employed author of children’s books. The taxpayer wish to minimize their tax by deferring income and accelerating deductions when possible.

1. The taxpayers incurred the following medical expenses before receiving $700 reimbursement from their health insurance policy:
Medical Premiums $4,000
Doctors $1,000
Chiropractor $ 600
Dentist $1,000
Vet Fees (family dog) $ 300
Prescription Drugs $ 300
Over-the-counter drugs (aspirin, cough syrup) $ 200

2.The taxpayers pay the following property taxes:
House $12,000
Car (ad valorem) $ 500

Answer 1

Some deductions can only be itemized and claimed in excess of a floor. For example, medical expenses can be deducted to the extent they exceed 10% of AGI (this amount was 7.5% of AGI in 2017 and 2018). Maximum deduction we can claim i.e $ 670 (10% of $ 6700)) and amount of $ 700 as reimbursement of expense will be reduced from the deduction

Calculation : 4000+1000+600+1000+300+300+200-700 (reimbursement expense)=6700

Maximum deductions of property Taxes we can claim combindly (Married Couple)- $10000 and if they filing seperately each can claim maximum of deduction of $ 5000 in the above case,we can file a return for couple can claim maximum $10000 against $ 12500