Caleb's medical expenses before reimbursement for the year include the following: Caleb's AGI for the year is $50,000.He is single and age 58.Caleb also receives a reimbursement for medical expenses of $1,000.Caleb's deductible medical expenses that will be added to the other itemized deduction will be

Question

Caleb's medical expenses before reimbursement for the year include the following:  Caleb's AGI for the year is $50,000.He is single and age 58.Caleb also receives a reimbursement for medical expenses of $1,000.Caleb's deductible medical expenses that will be added to the other itemized deduction will be

Quizplus · Accepted Answer

Caleb's deductible medical expenses are calculated by subtracting 7.5% of his AGI from his total medical expenses before reimbursement. 
Total medical expenses before reimbursement = $11,000 
7.5% of AGI = 0.075 x $50,000 = $3,750 
Deductible medical expenses = $11,000 - $1,000 reimbursement - $3,750 = $6,250. 
Since the deductible medical expenses must exceed the standard deduction of $6,300 for a single filer, Caleb can only deduct $6,250 instead of $10,350 as in choice A. Therefore, the correct answer is B.

Caleb's Medical Expenses Before Reimbursement for the Year Include the Following