Richard,age 50,is employed as an actuary.For calendar year 2015,he had AGI of $130,000 and paid the following medical expenses: Medical insurance premiums $5,300 Doctor and dentist bills for Derrick and Jane (Richard's parents) 7,900 Doctor and dentist bills for Richard 5,100 Prescribed medicines for Richard 830 Nonprescribed insulin for Richard 960 Derrick and Jane would qualify as Richard's dependents except that they file a joint return.Richard's medical insurance policy does not cover them.Richard filed a claim for $4,800 of his own expenses with his insurance company in November 2015 and received the reimbursement in January 2016.What is Richard's maximum allowable medical expense deduction for 2015?
A)$0
B)$7,090
C)$13,000
D)$20,090
E)None of the above

Question

Quizplus · Accepted Answer

Richard can deduct medical expenses that exceed 10% of his AGI. His AGI is $130,000, so 10% is $13,000. His total medical expenses are $5,300 + $5,100 + $830 + $960 = $12,190. Since he filed a claim for $4,800, this amount is not deductible in 2015. Therefore, his deductible expenses are $12,190 - $4,800 = $7,390. However, since this does not exceed 10% of his AGI, the deductible amount is $7,090 ($12,190 - $5,100).

Richard,age 50,is Employed as an Actuary