Question

Randal Ice has adjusted gross income of $32,000. He has medical expenses for the year of $4,500. How much of these expenses can he deduct from adjusted gross income? Assume the tax laws are those presented in your textbook.

Answer 1

Deductible Medical Expenses
S.No.	Particulars	Details	Years
			2017/2018	2019
1	Adjusted Gross Income	A	32000	32000
2	Limit of unqualified expenses	B	7.50%	10.00%
3	Monetary Limit of Unqualified Medical expenses	C=A X B	2400	3200
4	Actual Expenses Incurred	D	4500	4500
5	Allowable Medical Deduction (Excess of Unqualified limit)	E=D-C	2100	1300
Note
1	Year not given in question hence question solved as per rules of three years.
2	IRS allow excess of 7.5% of Adjusted Gross Income as qualified Medical expense up to 2017/18.
	From 01st January 2019 this limit has been enhanced to 10%.