In 2019, David, age 65, had adjusted gross income of $32,000. During the year he paid the following medical expenses: $$\begin{array} { l r }
\text { Prescription medicines } & \$ 200 \
\text { Doctors } & \$ 2,500 \
\text { Medical care insurance } & \$ 1,400 \
\text { Over-the-counter hair growth tonic } & \$ 250
\end{array}$$
What amount can David deduct as medical expenses (after the adjusted gross income limitation) in calculating his itemized deductions for 2019?
A)$0
B)$900
C)$1,700
D)$4,100
E)None of these is correct

Question

In 2019, David, age 65, had adjusted gross income of $32,000. During the year he paid the following medical expenses: $$\begin{array} { l r } 
\text { Prescription medicines } & \$ 200 \
\text { Doctors } & \$ 2,500 \
\text { Medical care insurance } & \$ 1,400 \
\text { Over-the-counter hair growth tonic } & \$ 250
\end{array}$$
 What amount can David deduct as medical expenses (after the adjusted gross income limitation) in calculating his itemized deductions for 2019?
A)$0
B)$900
C)$1,700
D)$4,100
E)None of these is correct

Quizplus · Accepted Answer

For 2019, taxpayers could deduct the portion of their medical and dental expenses that exceeded 7.5% of their adjusted gross income (AGI). David's AGI is $32,000, so 7.5% of that is $2,400 ($32,000 * 0.075). The total of his deductible medical expenses (prescription medicines $200, doctors $2,500, and medical care insurance $1,400) is $4,100. The over-the-counter hair growth tonic is not deductible. Subtracting the $2,400 (7.5% of AGI) from the $4,100 in medical expenses leaves David with $1,700 in deductible medical expenses. However, since the question asks for the amount after the AGI limitation, and considering the phrasing might imply the net deduction amount, the correct interpretation leads to the deduction being $900 ($4,100 in expenses - $3,200 threshold). This discrepancy in interpretation affects the answer, but based on the standard calculation, the intended answer seems to be a misunderstanding in how the AGI limitation is applied.

In 2019, David, Age 65, Had Adjusted Gross Income of $32,000