Marilyn, Ed's daughter who would otherwise qualify as his dependent, filed a joint return with her husband Henry. Ed, who had AGI of $150,000, incurred the following expenses: Ed has a medical expense deduction of:
A)$0.
B)$50.
C)$1,250.
D)$12,500.
E)None of the above.

Question

Marilyn, Ed's daughter who would otherwise qualify as his dependent, filed a joint return with her husband Henry. Ed, who had AGI of $150,000, incurred the following expenses:  Ed has a medical expense deduction of:
A)$0. 
B)$50. 
C)$1,250. 
D)$12,500. 
E)None of the above.

Quizplus · Accepted Answer

Ed can only claim medical expenses that exceed 7.5% of his AGI, which would be $11,250. However, Marilyn filing a joint return with her husband means she is not considered Ed's dependent for tax purposes, and therefore her income is not included in Ed's AGI. This means Ed's actual AGI is $150,000 - $24,800 (standard deduction for single filers) = $125,200. 7.5% of this amount is $9,390, so Ed can only deduct medical expenses that exceed this amount. As his total medical expenses are $10,640, Ed can deduct $1,250 ($10,640 - $9,390) as a medical expense deduction.

Marilyn, Ed's Daughter Who Would Otherwise Qualify as His Dependent