Roger is employed as an actuary.For calendar year 2012, he had AGI of $130,000 and paid the following medical expenses: Derrick and Jane would qualify as Roger's dependents except that they file a joint return.Roger's medical insurance policy does not cover them.Roger filed a claim for $4,800 of his own expenses with his insurance company in November 2012 and received the reimbursement in January 2013.What is Roger's maximum allowable medical expense deduction for 2012?
A)$9,750.
B)$10,340.
C)$19,130.
D)$20,090.
E)None of the above.

Question

Roger is employed as an actuary.For calendar year 2012, he had AGI of $130,000 and paid the following medical expenses:  Derrick and Jane would qualify as Roger's dependents except that they file a joint return.Roger's medical insurance policy does not cover them.Roger filed a claim for $4,800 of his own expenses with his insurance company in November 2012 and received the reimbursement in January 2013.What is Roger's maximum allowable medical expense deduction for 2012?
A)$9,750. 
B)$10,340. 
C)$19,130. 
D)$20,090. 
E)None of the above.

Quizplus · Accepted Answer

First, we need to calculate Roger's adjusted gross income (AGI) to find out his medical expense deduction limit.

AGI = $130,000

Next, we need to calculate 10% of his AGI since that's the threshold for deductible medical expenses.

10% of $130,000 = $13,000

Since Roger's total medical expenses for the year ($10,340) is less than $13,000, he can deduct all of it.

We add up his medical expenses:

$1,200 (dental expenses) 
$800 (eyeglasses) 
$2,600 (hospital bills) 
$1,500 (doctor visits) 
$1,640 (prescription drugs) 
$2,500 (health insurance premiums) 
$400 (crutches)

Total medical expenses = $10,340

Thus, Roger's maximum allowable medical expense deduction for 2012 is $10,340.

Roger Is Employed as an Actuary