Question 1

In 2017,Brandon,age 72,paid $3,000 for long-term care insurance premiums.He may include the $3,000 in computing his medical expense deduction for the year.

Accepted Answer

Long-term care insurance premiums are considered a qualified medical expense and can be included in the computation of medical expense deduction for individuals who itemize their deductions on Schedule A of their tax return. However, there are limits to the amount of the premium that can be deducted based on age and other factors. In 2017, a taxpayer who was 71 years or older could deduct up to $4,090 for long-term care insurance premiums.

Question 2

Chad pays the medical expenses of his son,James.James would qualify as Chad's dependent except that he earns $7,500 during the year.Chad may claim James' medical expenses even if he is not a dependent.

Accepted Answer

According to the IRS, a taxpayer can claim medical expenses paid for someone who would qualify as their dependent even if they do not actually claim the person as a dependent on their tax return. As long as the person meets the IRS definition of a dependent and the medical expenses were paid by the taxpayer, they can be claimed as a deduction. The fact that James earns $7,500 does not disqualify him from being considered a dependent for purposes of claiming his medical expenses.

Question 3

Upon the recommendation of a physician,Ed has a swimming pool installed at his residence because of a heart condition.If he is allowed to deduct all or part of the cost of the pool,Ed's increase in utility bills due to the operation of the pool qualifies as a medical expense.

Accepted Answer

The increase in utility bills directly relates to the operation of the pool, which was installed for medical purposes, therefore it qualifies as a medical expense.

Question 4

Jim's employer pays half of the premiums on a group medical insurance plan covering all employees,and employees pay the other half.Jim can exclude the half of the premium paid by his employer from his gross income and may include the half he pays in determining his medical expense deduction.

Accepted Answer

This statement is true. Employers often offer group medical insurance plans that the employer pays for partially, while the employee pays the rest. The portion of the premium paid by the employer is not included in the employee's gross income, while the portion paid by the employee can be included in their medical expense deduction calculations.

Question 5

Sergio was required by the city to pay $2,000 for the cost of new curbing installed by the city in front of his personal residence.The new curbing was installed throughout Sergio's neighborhood as part of a street upgrade project.Sergio may not deduct $2,000 as a tax,but he may add the $2,000 to the basis of his property.

Accepted Answer

According to IRS rules, the cost of improvements that add to the value of the property, such as new curbing, can be added to the basis of the property. This can be helpful when calculating gains or losses after selling the property. However, it cannot be deducted as a tax expense.

Question 6

The election to itemize is appropriate when total itemized deductions are less than the standard deduction based on the taxpayer's filing status.

Accepted Answer

The election to itemize is appropriate when total itemized deductions are greater than the standard deduction based on the taxpayer's filing status.

Question 7

Mindy paid an appraiser to determine how much a capital improvement made for medical reasons increased the value of her personal residence.The appraisal fee qualifies as a deductible medical expense.

Accepted Answer

The answer of Mindy paid an appraiser to determine how...

Question 8

Personal expenditures that are deductible as itemized deductions include medical expenses,Federal income taxes,state income taxes,property taxes on a personal residence,mortgage interest,and charitable contributions.

Accepted Answer

Federal income taxes are not deductible as itemized deductions; however, state income taxes, property taxes on a personal residence, mortgage interest, and charitable contributions are deductible.

Question 9

A taxpayer may not deduct the cost of new curbing (relative to a personal residence),even if the construction is required by the city and the curbing provides an incidental benefit to the public welfare.

Accepted Answer

The cost of new curbing for a personal residence is not deductible as it is considered a capital expense and is non-deductible under the tax law, even if it provides incidental benefits to the public welfare or is required by the city.

Question 10

Georgia contributed $2,000 to a qualifying Health Savings Account in the current year.The entire amount qualifies as an expense deductible for AGI.

Accepted Answer

Contributions to a Health Savings Account are deductible for AGI, up to certain limits. Therefore, the entire $2,000 contribution would qualify as an expense deductible for AGI.

Question 11

In 2018,Rhonda received an insurance reimbursement for medical expenses incurred in 2017.She is not required to include the reimbursement in gross income in 2018 if she claimed the standard deduction in 2017.

Accepted Answer

According to IRS regulations, if Rhonda claimed the standard deduction in 2017, she is not required to include the insurance reimbursement in her gross income for 2018. This is because the reimbursement is considered a return of previously deducted medical expenses, and the standard deduction already took those expenses into account.

Question 12

In 2017,Dena traveled 600 miles for specialized medical treatment that was not available in her hometown.She paid $90 for meals during the trip,$145 for a hotel room for one night,and $15 in parking fees.She did not keep records of other out-of-pocket costs for transportation.Dena can include $167 in computing her medical expenses.

Accepted Answer

The answer of In 2017,Dena traveled 600 miles for specialized...

Question 13

Maria traveled to Rochester,Minnesota,with her son,who had surgery at the Mayo Clinic.Her son stayed at the clinic for the duration of his treatment.She paid airfare of $300 and $50 per night for lodging.The cost of Maria's airfare and lodging cannot be included in determining her medical expense deduction.

Accepted Answer

The answer of Maria traveled to Rochester,Minnesota,with her son,who had...

Question 14

Mason,a physically handicapped individual,pays $10,000 this year for the installation of wheelchair ramps,support bars,and railings in his personal residence.These improvements increase the value of his personal residence by $2,000.Only $8,000 of the expenditure qualifies as a medical expense for tax purposes.

Accepted Answer

The $2,000 increase in value does not affect the medical expense deduction. Only the $8,000 that qualifies as a medical expense can be deducted.

Question 15

Shirley pays FICA (employer's share) on the wages she pays her housekeeper to clean and maintain Shirley's personal residence.The FICA payment is not deductible as an itemized deduction.

Accepted Answer

FICA taxes paid by an employer (including household employers) are not deductible as itemized deductions.

Question 16

Bill paid $2,500 of medical expenses for his daughter,Marie.Marie is married to John and they file a joint return.Bill can include the $2,500 of expenses when calculating his medical expense deduction.

Accepted Answer

According to the IRS rules, an individual can include medical expenses paid for their spouse, dependents or children who are under the age of 27, even if they are not dependents. As Marie is Bill's daughter and is married, he can still include the $2,500 of medical expenses paid for her in his medical expense deduction calculation. However, John cannot include the expenses in his own calculation as he is not related to Bill.

Question 17

Matt,a calendar year taxpayer,pays $11,000 in medical expenses in 2017.He expects $5,000 of these expenses to be reimbursed by an insurance company in 2018.In determining his medical expense deduction for 2017,Matt must reduce his 2017 medical expenses by the amount of the reimbursement he expects in 2018.

Accepted Answer

The answer of Matt,a calendar year taxpayer,pays $11,000 in medical...

Question 18

Adrienne sustained serious facial injuries in a motorcycle accident.To restore her physical appearance,Adrienne had cosmetic surgery.She cannot deduct the cost of this procedure as a medical expense.

Accepted Answer

Cosmetic surgery is generally not deductible as a medical expense unless it is medically necessary to correct a deformity arising from a congenital abnormality, a personal injury resulting from an accident or trauma, or a disfiguring disease. In Adrienne's case, the cosmetic surgery was done for the purpose of restoring her physical appearance, which does not meet the criteria for a deductible medical expense.

Question 19

A physician recommends a private school for Ellen's dependent child.Because of the physician's recommendation,the cost of the private school will qualify as a medical expense deduction (subject to percentage limitations).

Accepted Answer

The cost of a private school is generally not considered a medical expense deduction, even if recommended by a physician. Medical expense deductions are typically limited to expenses that are directly related to the prevention, diagnosis, or treatment of a medical condition.

Question 20

Fees for automobile inspections,automobile titles and registration,bridge and highway tolls,parking meter deposits,and postage are not deductible if incurred for personal reasons,but they are deductible as deductions for AGI if incurred as a business expense by a self-employed taxpayer.

Accepted Answer

Fees for automobile inspections, automobile titles and registration, bridge and highway tolls, parking meter deposits, and postage are not deductible if incurred for personal reasons, but they are deductible as deductions for AGI if incurred as a business expense by a self-employed taxpayer.

Quiz 10: Deductions and Losses: Certain Itemized Deductions