[Anonymous]

Fred (social security number 123-67-5489) and Laura Shaw provided you with the following tax return data. The amount

from Form 1040, line 38 is $80,000.

Medical and dental expenses

Medical insurance premiums $3,600

Disability income insurance premiums 800

Prescription drugs 825

Nonprescription medicine 280

Dr. Jones — neurologist 2,250

Dentist 750

Dr. Smith—LASIK surgery 900

Insurance reimbursement for medical bills 2,000

Transportation to and from doctors 80

Answer:

Form 1040-Schedule A

Line 1 Medical and Dental Expenses: 6405

The disability income insurance premiums do not represent medical insurance and are not deductible. Similarly, although

prescription drugs are deductible, nonprescription medicine is not deductible.

---

How did you get 6405 from the list of medical expense items? I don’t see how that is possible.

[Only Reg Left]

Medical insurance premiums $3,600

Prescription drugs 825

Dr. Jones — neurologist 2,250

Dentist 750

Dr. Smith—LASIK surgery 900

Insurance reimbursement for medical bills (2,000)

Transportation to and from doctors 80

Add that up and you'll get the $6,405.

Lasik is deductible; you don't correct your eyes for cosmetic purposes.

AUD - 68, 77
REG - 84* (Expired)
FAR - 83
BEC - 74, 74, 72, 72, 84

[Only Reg Left]

Medical insurance premiums $3,600

Prescription drugs 825

Dr. Jones — neurologist 2,250

Dentist 750

Dr. Smith—LASIK surgery 900

Insurance reimbursement for medical bills (2,000)

Transportation to and from doctors 80

Add that up and you'll get the $6,405.

Lasik is deductible; you don't correct your eyes for cosmetic purposes.

AUD - 68, 77
REG - 84* (Expired)
FAR - 83
BEC - 74, 74, 72, 72, 84

[Anonymous]

Why do you deduct the 2000 insurance reimbursement instead of just excluding it?

[Anonymous]

Why do you deduct the 2000 insurance reimbursement instead of just excluding it?

[seattleacct]

You can't exclude the $2k insurance reimbursement, because otherwise you'd be overstating your medical expenses.

You can deduct your approved medical expenses, except to the extent that you were reimbursed. Your total out of pocket is 8,405 minus 2,000, because really you're only out $6,405.

I suppose one way to look at it would be that your expenses are $8405 and your ‘income' is 2,000, the net total is 6405.

B:76
A:64, 73, 91!
R:77
F:76

CPAexcel, Wiley Test Bank, Ninja Audio & Notes

[seattleacct]

You can't exclude the $2k insurance reimbursement, because otherwise you'd be overstating your medical expenses.

You can deduct your approved medical expenses, except to the extent that you were reimbursed. Your total out of pocket is 8,405 minus 2,000, because really you're only out $6,405.

I suppose one way to look at it would be that your expenses are $8405 and your ‘income' is 2,000, the net total is 6405.

B:76
A:64, 73, 91!
R:77
F:76

CPAexcel, Wiley Test Bank, Ninja Audio & Notes

[Author]

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