Don, age 61, incurred $28,000 of medical expenses in the current year. His insurance company reimbursed him $6,000. Assu...

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Question

Don, age 61, incurred $28,000 of medical expenses in the current year. His insurance company reimbursed him $6,000. Assu...

Don, age 61, incurred $28,000 of medical expenses in the current year. His insurance company reimbursed him $6,000. Assuming his AGI is $100,000, what is the amount of medical expense deduction Don can claim for the year?

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Answer 1

Answer #1

The solution is mentioned below :

Total medical expenses = $ 28,000

Reimbursed amount = $ 6000

Adjusted gross income = $ 100000

The standard deduction rate of medical is change from 7.5% to 10% in 2019

According to 2019 rate of 10%,

The AGI of 10% is = $ 10000

The amount which exceeds the 10% of AGI amount will allowed as a deduction from taxable amount.

Exceeded amount = $ 28000 - $10000

Exceeded amount = $ 18000

And the insurance reimbursement should also be deducted from exceeded amount

Deductible amount = $ 18000 - $6000

Final amount Don can claim this year via standard deduction will be $12000 because the amount of reimbursement shall be taxable because it is reimbursed from the insurance company.

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Answer 2

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