Question

Your dear cousin - who is 30 years old, single, no kids, and a restaurant manager...

Your dear cousin - who is 30 years old, single, no kids, and a restaurant manager - heard that you are completing a course in Federal Income Tax Accounting at Henderson State University. She has asked you for help in preparing her 2018 tax return.

Additionally, she gave you the following list of what she considers to be "deductions." If the item is potentially a FROM AGI deduction, enter ID (for itemized deduction). If it not deductible, enter ND.

 Medical insurance premiums \$1,900 Prescription drugs 250 Dentist 2,250 Emergency room fee 885 Cold pills, aspirin, and other OTC meds 120 Rental fee for crutches 80 Real estate taxes 1,600 State income taxes 2,300 Home mortgage interest 4,800 Credit card interest 1,375 Charitable contributions to church 2,050 Gambling losses (\$0 in winnings) 300

Taking into consideration limitations on itemized deductions and a total AGI of \$57,400, determine the total deductible items under each major category of itemized deductions. Type the amounts using commas and positive numbers.

 Medical Deductions Taxes Interest Charitable Deductions Miscellaneous Itemized Deductions

Therefore, total itemized deductions are .

To minimize your cousin's tax liability, will you use itemized deductions or the standard deduction as her FROM AGI deductions? (Type itemized or standard in the blank provided.)

 AGI \$57400 Medical insurance premiums 1900 ID Prescription drugs 250 ID Dentist 2,250 ID Emergency room fee 885 ID Cold pills, aspirin, and other OTC meds 120 ID Rental fee for crutches 80 ID Real estate taxes 1,600 ID State income taxes 2,300 ID Home mortgage interest 4,800 ID Credit card interest 1,375 No Charitable contributions to church 2,050 ID Gambling losses (\$0 in winnings) 300 No Limit Eligible Medical Deductions = 57400*10% = 5740 5,485 Taxes 3,900 Interest 4,800 Charitable Deductions = 57400*50% = 28700 2,050 Miscellaneous Itemized Deductions = (57400*2%) = In excess of \$1,148 0 Total Itemized Deductions 16,235 Standard Deductions 12000 Itemized deductions is used