Question 1

Medical expenses are deductible as a from AGI deduction to the extent that they exceed 2 percent of the taxpayer's AGI.

Accepted Answer

The floor for medical expenses is 10% of AGI.

Question 2

All of the following payments for medical items are deductible with the exception of the payment for
A)insulin.
B)general appointment for teeth cleaning.
C)acupuncture for specific medical purposes.
D)nonprescription medicine for treatment of a specific medical condition.

Accepted Answer

D

Question 3

Medical expenses incurred on behalf of children of divorced parents are deductible by the parent who pays the expenses but only if that parent also is entitled to the dependency exemption.

Accepted Answer

False

Question 4

Van pays the following medical expenses this year: • $1,500 for doctor bills for Van's son who is claimed as a dependent by Van's former spouse.
• $300 for Van's eyeglasses.
• $900 for Van's dental work.
• $3,800 for Van's face lift.Van,a newscaster,is worried about the wrinkles around his eyes.
How much can Van include on his return as qualified medical expenses before limitation?
A)$1,200
B)$2,400
C)$2,700
D)$6,500

Accepted Answer

Van can include $300 for his eyeglasses and $900 for his dental work as qualified medical expenses. He cannot include the $1,500 for his son's doctor bills, as his son is claimed as a dependent by Van's former spouse. The face lift expense is also not eligible unless it is for the treatment of a medical condition, not solely for cosmetic purposes. Therefore, the total amount of qualified medical expenses before limitation is $1,200 + $900 = $2,100. However, there is a limitation that allows Van to deduct only the amount that exceeds 7.5% of his adjusted gross income. Without information on Van's income, we cannot calculate the actual deduction.

Question 5

If a medical expense reimbursement is received in a year after a deduction has been taken on a previous year's return,the previous year's return must be amended to eliminate the reimbursed expense.

Accepted Answer

The answer of If a medical expense reimbursement is received...

Question 6

For individuals,all deductible expenses must be classified as deductions for AGI or deductions from AGI.

Accepted Answer

All deductible expenses must be classified either as deductions for AGI (which reduce your gross income) or deductions from AGI (which reduce your taxable income).

Question 7

In 2016 Sela traveled from her home in Flagstaff to San Francisco to seek specialized medical care.Because she was unable to travel alone,her father accompanied her.Total expenses included:  The total medical expenses deductible before the 10% limitation are
A)$1,600.
B)$2,090.
C)$2,500.
D)$2,690.

Accepted Answer

The total expenses listed in the question are $11,350. However, not all of these expenses are deductible before the 10% limitation. According to IRS Publication 502, the following expenses are deductible before the 10% limitation:
- Transportation costs primarily for and essential to medical care (such as ambulance service, bus, taxi, train, or plane fares)
- Lodging expenses (but not meals) while away from home for medical treatment
- Meals and lodging expenses for a parent or other person who must accompany a patient to a medical facility if the medical treatment is outpatient treatment
Based on the information given in the question, it can be assumed that the transportation costs include airfare for both Sela and her father. According to the Bureau of Transportation Statistics, the average cost of a one-way domestic flight in the US in 2016 was $344. Therefore, the airfare for both Sela and her father was likely around $688.
In addition, Sela and her father likely stayed in lodging while in San Francisco for the medical treatment. Let's assume they stayed for four nights at a cost of $150 per night, which is a reasonable estimate for a mid-range hotel in San Francisco. This would make the total lodging expenses $600.
Based on this information, the deductible expenses before the 10% limitation would be:
- Transportation costs: $688
- Lodging expenses: $600
This brings the total deductible expenses to $1,288. Adding in the additional medical expenses of $1,802 (the total expenses minus the deductible expenses) gives a total of $3,090. However, the question asks for the deductible expenses before the 10% limitation, so the answer is B) $2,090.

Question 8

Medical expenses paid on behalf of an individual who could be the taxpayer's dependent except for the gross income or joint return tests are deductible as itemized deductions.

Accepted Answer

According to IRS Publication 502, medical expenses paid on behalf of an individual who could be the taxpayer's dependent except for the gross income or joint return tests are deductible as itemized deductions.

Question 9

Capital expenditures incurred for medical purposes which permanently improve or better the taxpayer's property are deductible,but only to the extent the cost exceeds the increase in fair market value to the property attributable to the capital expenditure.

Accepted Answer

This is true according to IRS regulations. The amount of the capital expenditure that exceeds the increase in fair market value can be claimed as a deduction.

Question 10

If the principal reason for a taxpayer's presence in an institution (e.g.a nursing home)is the need and availability of medical care,the entire cost of lodging and meals is considered qualified medical expenditures.

Accepted Answer

According to the IRS, if the primary reason for a taxpayer's presence in an institution is for medical care, the cost of lodging and meals can be considered as qualified medical expenses.

Question 11

Jeffrey,a T.V.news anchor,is concerned about the wrinkles around his eyes.Because it is job-related,the cost of a face lift to eliminate these wrinkles is a deductible medical expense.

Accepted Answer

The answer of Jeffrey,a T.V.news anchor,is concerned about the wrinkles...

Question 12

All of the following are deductible as medical expenses except
A)vitamins and health foods that improve a taxpayer's general health.
B)payments for a vision exam and contact lenses.
C)payments to a hospital for laboratory fees and X-rays for diagnosis of a medical problem.
D)cosmetic surgery necessary to correct a deformity arising from a congenital abnormality.

Accepted Answer

While payments for medical treatment and prescriptions are deductible, vitamins and health foods that improve a taxpayer's general health are not.

Question 13

A medical expense is generally deductible only in the year in which the expense is actually paid.

Accepted Answer

Medical expenses can only be deducted in the year that they were paid, not necessarily the year that the medical service was provided.

Question 14

Expenditures for a weight reduction program are deductible if recommended by a physician to treat a specific medical condition such as hypertension caused by excess weight.

Accepted Answer

The IRS allows for deductions of weight loss programs when they are recommended by a physician to treat a specific medical condition, such as hypertension or obesity-related conditions. Otherwise, weight loss programs are generally not deductible as a medical expense.

Question 15

Due to stress on the job,taxpayer Fiona began to experience anxiety attacks.Her doctor advised her to engage in some relation activities.Fiona enrolled in yoga lessons.The cost of the yoga lessons to alleviate this medical condition is tax deductible.

Accepted Answer

The IRS generally does not allow deductions for expenses related to general health improvement or stress relief, such as yoga classes, unless they are specifically prescribed as a treatment for a diagnosed medical condition.

Question 16

In order for a taxpayer to deduct a medical expense,the amount must be paid to a licensed physician.

Accepted Answer

Medical expenses can be deducted if they are paid for medical care by a licensed medical practitioner, which includes not just physicians, but also dentists, chiropractors, and other qualified medical professionals.

Question 17

The definition of medical care includes preventative measures such as routine physical examinations.

Accepted Answer

Medical care includes not just treating illnesses or injuries, but also focusing on preventive measures such as regular check-ups and screenings to maintain overall health and identify potential health issues before they become more serious.

Question 18

If a prepayment is a requirement for the receipt of the medical care,the payment is deductible in the year paid rather than the year in which the care is rendered.

Accepted Answer

If a prepayment is required for medical care, it is deductible in the year it is paid, regardless of when the care is actually received. This is in accordance with the IRS rules regarding medical expense deductions.

Question 19

Expenditures for long-term care insurance premiums qualify as a medical expense deduction subject to an annual limit based upon the age of an individual.

Accepted Answer

Long-term care insurance premiums can be deducted as a medical expense, subject to certain limitations based on age.

Question 20

Expenditures incurred in removing structural barriers in the home of a physically handicapped individual are deductible only to the extent the costs exceed the increase in fair market value to the property attributable to the capital expenditure.

Accepted Answer

The answer of Expenditures incurred in removing structural barriers in...

Quiz 7: Itemized Deductions