Luther and Lexi are married and file a joint return. Luther and Lexi were enrolled in their Marketplace second lowest cost silver (SLCSP) high deductible health plan (HDHP) with family coverage for all of 2022.Their annual enrollment premium was $7,000. They did not receive the benefit of an Advance Premium Tax Credit (APTC). Lexi and Luther's modified adjusted gross income (MAGI) for 2022 is $70,000. This is more than 400% of the Federal Poverty Line (FPL) for the contiguous 48 states, where they live. In 2022, Lexi contributed $2,300 to her Health Savings Account (HSA). Of that amount, $1,300 was made pretax through her employer’s cafeteria plan. She received Form W-2 from her employer reporting this amount in Box 12a, with code W. She made the remaining $1,000 contribution by electronic deposit into the HSA from her checking account. Luther did not contribute to his HSA in 2022. Luther's Form 1099-SA shows a distribution from his HSA of $500. They have receipts showing they paid $200 for new eyeglasses for Luther, $250 for over the counter allergy medicine for Luther, and $100 for Lexi's doctor visit copays. Luther and Lexi donated $450 by check to their local food bank. The food bank is a qualified organization and provided Luther and Lexi with a written acknowledgment of their donation. They contributed $50 in cash to a local family in need. They also donated clothing in good condition with fair market value of $200 to Goodwill. They have a receipt for the donation. Luther and Lexi are U.S. citizens with valid Social Security numbers. They do not have enough expenses to itemize their deductions. What amount of Premium Tax Credit (PTC) may Luther and Lexi claim? How much can Luther and Lexi deduct for their charitable donations?

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

Luther and Lexi are married and file a joint return.
Luther and Lexi were enrolled in their Marketplace second lowest cost silver (SLCSP) high
deductible health plan (HDHP) with family coverage for all of 2022.Their annual enrollment
premium was $7,000. They did not receive the benefit of an Advance Premium Tax Credit (APTC).
Lexi and Luther's modified adjusted gross income (MAGI) for 2022 is $70,000. This is more than
400% of the Federal Poverty Line (FPL) for the contiguous 48 states, where they live.
In 2022, Lexi contributed $2,300 to her Health Savings Account (HSA). Of that amount, $1,300 was
made pretax through her employer’s cafeteria plan. She received Form W-2 from her employer
reporting this amount in Box 12a, with code W. She made the remaining $1,000 contribution by
electronic deposit into the HSA from her checking account. Luther did not contribute to his HSA in
2022.
Luther's Form 1099-SA shows a distribution from his HSA of $500. They have receipts showing
they paid $200 for new eyeglasses for Luther, $250 for over the counter allergy medicine for Luther,
and $100 for Lexi's doctor visit copays.
Luther and Lexi donated $450 by check to their local food bank. The food bank is a qualified
organization and provided Luther and Lexi with a written acknowledgment of their donation. They
contributed $50 in cash to a local family in need. They also donated clothing in good condition with
fair market value of $200 to Goodwill. They have a receipt for the donation.
Luther and Lexi are U.S. citizens with valid Social Security numbers. They do not have enough
expenses to itemize their deductions.