Paul and Patty Black (both age 66) are married and together have AGI of $105,000 in 2019. They have two dependents and file a joint return. During the year, they paid $8,000 for medical insurance, $15,000 in doctor bills and hospital expenses, and $1,000 for prescribed medicine and drugs.2020. Determine the deduction allowable for medical expenses incurred in 2019.
a. In December 2019, the Blacks received an insurance reimbursement of $3,500 for hospitalization expenses. Determine the deduction allowable for medical expenses paid during the year.
b. Assume instead that the Blacks received the $3,500 insurance reimbursement in February
c. Assume that the Blacks received the $3,500 insurance reimbursement in February 2020.
Discuss whether the reimbursement will be included in their gross income for 2020.

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The Answer of Paul and Patty Black (both age 66) are married and together have AGI of $105,000 in 2019. They have two dependents and file a joint return. During the year, they paid $8,000 for medical insurance, $15,000 in doctor bills and hospital expenses, and $1,000 for prescribed medicine and drugs.2020. Determine the deduction allowable for medical expenses incurred in 2019.
a. In December 2019, the Blacks received an insurance reimbursement of $3,500 for hospitalization expenses. Determine the deduction allowable for medical expenses paid during the year.
b. Assume instead that the Blacks received the $3,500 insurance reimbursement in February
c. Assume that the Blacks received the $3,500 insurance reimbursement in February 2020.
Discuss whether the reimbursement will be included in their gross income for 2020.

Paul and Patty Black (Both Age 66) Are Married and Together