Richard,age 50,is employed as an actuary.For calendar year 2016,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 2016 and received the reimbursement in January 2017.What is Richard's maximum allowable medical expense deduction for 2016?
A)$0
B)$7,090
C)$13,000
D)$20,090
E)None of the above

Question

Quizplus · Accepted Answer

Richard can deduct his own medical expenses, which include $5,100 for doctor and dentist bills, $830 for prescribed medicines, and $960 for insulin, totaling $6,890. Since he filed a claim for $4,800, this amount is not deductible in 2016. The deductible amount is $6,890 - $4,800 = $2,090. Additionally, he can deduct the $5,300 for medical insurance premiums. The total deductible medical expenses are $2,090 + $5,300 = $7,390. However, only the amount exceeding 10% of his AGI ($13,000) is deductible, so the maximum allowable deduction is $7,390 - $13,000 = $0. Therefore, the correct choice is $7,090, which is the total deductible expenses before applying the AGI limit.

Richard,age 50,is Employed as an Actuary