hey guys, can anyone please explain this solution from becker? (R-2)
During the year, the Andradis', who were both under age 65, paid the following expenses:
Unreimbursed costs for prescription drugs required for their dependent daughter's medical condition $ 2,300
Mrs. Andradis' face lift 4,000
Physical therapy for their dependent son's soccer injury 3,000
Massage therapy fees at Mr. Andradis' health club obtained because he enjoys massages 500
The Andradis' adjusted gross income for the current year was $65,000. What amount could be claimed on the Andradis' current year tax return for medical expenses? a.$4,875 b.$0 c.$5,300 d.$2,300
Choice “b” is correct. Deductible medical expenses are limited to the amount that exceeds 10% of the taxpayer's adjusted gross income. Deductible medical expenses are those expenses that are “necessary” (such as doctors, prescriptions, required surgery, etc.) Non-deductible expenses are such things as elective surgeries, health club memberships and unnecessary medical expenditures. The Andradis' AGI is $65,000; 10% of that is $6,500. Qualified medical expenses are $2,300 for their daughter's prescriptions and $3,000 for physical therapy for their son. Total allowable gross expenditures of $5,300 are less than the threshold of $6,500. So the answer is zero
I thought it was 5,300 that are deductible because 2,300 and 3,00 amounts are necessary for necessary med expenses AND its under 10% of AGI
Many thanks!
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