[john b]

Jon Stenger, a cash-method taxpayer, age 32, had adjusted gross income of $35,000 in 2019. During the year he incurred and paid the following medical expenses:
Drugs and medicines prescribed by doctors $ 300
Health insurance premiums 1,750
Doctors’ fees 2,550
Eyeglasses 75
$4,675
Stenger received $900 in 2019 as reimbursement for a portion of the doctors’ fees. If Stenger were to itemize his deductions, what would be his allowable net medical expense deduction?

The answer is $275, it says to add up all the expense, and deduction 10% of AGI.

Why do they deduct 10% of AGI? Wouldn’t it be 7.5%? Is this different because Jon is a cash-method taxpayer? Thanks.

[Desmond]

Hi John. It has been updated to 10% for 2019 from 7.5% for 2018

[john b]

Thanks! This makes sense. Does anyone know if the 10% will be on the 2019 REG CPA exam? Or a way to confirm this? Thanks.

[Puppykoala]

You need to apply new rules to all thresholds after June 15. So yes. I suggest you get updated textbook if possible.

[Author]

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