Answered: During the 2020 tax year, Frank (age…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

During the 2020 tax year, Frank (age 65) and Betty (age 63) paid the following medical expenses:

Medical insurance	$425
Prescription medicines and drugs	364
Hospital bills	2,424
Doctor bills	725
Prescription Eyeglasses for Frank's dependent mother	75
Doctor bills for Betty's sister, who is claimed as a dependent by Frank and Betty	220

In addition, during 2020, they drove 700 miles for medical transportation in their personal automobile. Their insurance company reimbursed Frank and Betty $1,420 during the year for the medical expenses.

If their adjusted gross income for the year is $25,400, calculate their medical expense deduction. Use the Medical and Dental Expenses section of Schedule A reproduced below.

Enter all amounts as positive numbers. If required, round your answers to the nearest dollar.

		Caution. Do not include expenses reimbursed or paid by others.
Medical and Dental Expenses	1	Medical and dental expenses (see instructions) . . . . . . . . . .	1	fill in the blank 1
2	Enter amount from Form 1040 or Form 1040-SR, line 11	2	fill in the blank 2
3	Multiply line 2 by 7.5% (0.075) . . . . . . . . . . . . . . . . . . . . . .	3	fill in the blank 3
4	Subtract line 3 from line 1. If line 3 is more than line 1, enter -0- . . . . . . . . . . . . . . . . .	4	fill in the blank 4