Question

Frank, who is 50, had AGI of $37,600 in 2019. During the year, he paid the following medical expenses:

Drugs (prescribed by physicians)	$	600
Marijuana (prescribed by physicians)		1,500
Health insurance premiums–after taxes		1,550
Doctors’ fees		1,350
Eyeglasses		475
Over-the-counter drugs		300

Required:

Frank received $700 in 2019 for a portion of the doctors’ fees from his insurance. What is Frank’s medical expense deduction?

Answer 1

Eligible Medical Expenses:

Drugs (prescribed by physicians)	$	600
Marijuana (prescribed by physicians)		1,500
Health insurance premiums–after taxes		1,550
Doctors’ fees		1,350
Eyeglasses		475

Total of above: $5,475

Insurance company paid $700 as doctor fees which will be deduted from Medical expenses

Hence Eligible Medical expenses: $5,475- $700= $4,775

AGI is $37,600

Only the portion of medical costs that exceed 7.5 percent of AGI are deductible

7.5% of AGI is $37,600*7.5% = $2,820

Hence expenses $(4,775-2820) = $1,955 is allowed as dedution.