LO 5.1 2. In 2010, Margaret and John Murphy are married taxpayers who file a joint tax return with AGl of $25,000. During the year they incurred the following expenses:

Hospitalization insurance premiums $1,050 Premiums on an insurance policy that pays

$100 per day for each day Margaret is hospitalized 300 Medical care lodging (two people, one night) 65 Hospital bills 2,200 Doctor bills 850 Dentist bills 175 Prescription drugs and medicines 340 Psychiatric care 300 In addition, during the year, they drove 109 miles for medical transportation, and their insurance company reimbursed them $900 for the above expenses. On the following segment of Schedule A of Form 1040, calculate the Murphy’s medical expense deduction.

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Medical 1 and Caution. Do not include expenses reimbursed or paid by others. Medical and dental expenses (see page A-1). 2 Enter amount from Form 1040, Ine 38 2 Dental 3 Multiply line 2 by 7.5% (075) 3 Expenses 4 Subtract fire 3 from ine 1. Il line 3 is more than enter-0-