Caleb's medical expenses before reimbursement for the year include the following: Caleb's AGI for the year is $50,000. He is single and age 58. Caleb also receives a reimbursement for medical expenses of $1,000. Caleb's deductible medical expenses that will be added to the other itemized deduction will be
A)$10,350.
B)$9,100.
C)$14,500.
D)$15,100.

Question

Caleb's medical expenses before reimbursement for the year include the following:  Caleb's AGI for the year is $50,000. He is single and age 58. Caleb also receives a reimbursement for medical expenses of $1,000. Caleb's deductible medical expenses that will be added to the other itemized deduction will be
A)$10,350. 
B)$9,100. 
C)$14,500. 
D)$15,100.

Quizplus · Accepted Answer

Caleb's total medical expenses before reimbursement are $10,100. Since his AGI is $50,000, his medical expenses are only deductible to the extent that they exceed 7.5% of his AGI, which is $3,750. Therefore, Caleb's deductible medical expenses are $10,100 - $1,000 (reimbursement) - $3,750 (7.5% of AGI) = $5,350. However, there is also a $100 floor for medical expenses, meaning that only expenses above $100 are deductible. Therefore, Caleb's final deductible medical expenses are $5,350 - $100 = $5,250. Adding this to his other itemized deductions gives a total of $9,100 in deductible expenses.

Caleb's Medical Expenses Before Reimbursement for the Year Include the Following