Carlos incurs the following medical expenses during the current tax year:
?
$$\begin{array} { l r }
\text { Surgeon's fees } & \$ 2,000 \
\text { Medical insurance premiums } & 600 \
\text { Hospital fees } & 800 \
\text { Prescription drugs } & 310 \
\text { Wheel chair } & 200
\end{array}$$
Carlos's adjusted gross income for the year is $32,000. He receives a $500 reimbursement from his insurance company. Determine the amount of his medical expense deduction for the current year.

Question

Carlos incurs the following medical expenses during the current tax year:
?
$$\begin{array} { l r } 
\text { Surgeon's fees } & \$ 2,000 \
\text { Medical insurance premiums } & 600 \
\text { Hospital fees } & 800 \
\text { Prescription drugs } & 310 \
\text { Wheel chair } & 200
\end{array}$$
Carlos's adjusted gross income for the year is $32,000. He receives a $500 reimbursement from his insurance company. Determine the amount of his medical expense deduction for the current year.

Quizplus · Accepted Answer

Carlos's deductible medical expenses would be the total expenses incurred minus the reimbursement from his insurance company, which is: 
$8,550 - $500 = $8,050 
However, since his adjusted gross income is $32,000, and the threshold for deducting medical expenses is 10% of AGI, he can only deduct expenses that exceed $3,200 (10% of $32,000). Therefore, his medical expense deduction for the current year would be: 
$8,050 - $3,200 = $4,850
But since the question asks for the amount of deduction after the reimbursement, the answer is:
$4,850 - $500 = $1,010. So, the best choice is (C).

Carlos Incurs the Following Medical Expenses During the Current Tax