Asked by Abigail Rafael on Sep 22, 2024
Verified
Roland had $10,500 in medical expenses last year and has no medical insurance.The IRS allows medical expense deductions for the amount that exceeds 7.5% of a taxpayer's adjusted gross income.If Roland's adjusted gross income is $31,000,how much can he claim as a medical deduction?
A) $10,500
B) $8,175
C) $7,500
D) $750
Medical Deduction
An itemized deduction on personal income taxes for expenses related to healthcare beyond a certain percentage of adjusted gross income.
Adjusted Gross Income
Adjusted Gross Income (AGI) refers to an individual's total gross income minus specific deductions, used to determine taxable income on an income tax return.
Medical Expenses
Costs for healthcare services that can include but are not limited to, treatments, diagnostics, and medications.
- Pinpoint and work out deductions, credits, and exemptions and their effect on taxable income and amount of tax owed.
- Evaluate the financial impact of major life events and decisions, such as purchasing a home or medical expenses, on taxes.
Verified Answer
AI
abdullah idrees6 days ago
Final Answer :
B
Explanation :
To calculate the medical expense deduction, we first need to calculate 7.5% of Roland's adjusted gross income:
7.5% of $31,000 = $2,325
Next, we need to determine how much of Roland's medical expenses exceed this amount:
$10,500 - $2,325 = $8,175
Therefore, Roland can claim $8,175 as a medical expense deduction on his tax return.
7.5% of $31,000 = $2,325
Next, we need to determine how much of Roland's medical expenses exceed this amount:
$10,500 - $2,325 = $8,175
Therefore, Roland can claim $8,175 as a medical expense deduction on his tax return.
Learning Objectives
- Pinpoint and work out deductions, credits, and exemptions and their effect on taxable income and amount of tax owed.
- Evaluate the financial impact of major life events and decisions, such as purchasing a home or medical expenses, on taxes.