Question
Aaron, single, age 43, had AGI of $60,000 for 2019. He paid the following medical expenses in 2019: Hospital expenses - skiing accident $5,600 Doctor
Aaron, single, age 43, had AGI of $60,000 for 2019. He paid the following medical expenses in 2019:
Hospital expenses - skiing accident $5,600
Doctor bills & Prescriptions 1,400
Surgeon to get a nose job (not related to skiing injury) 5,000
Medical expenses he paid for his child (claimed by his former wife as a dependent). 1,200
Nursing care expenses for Aaron’s dependent Father, including $600 for cable TV for his room. 6,000
Medical and dental premiums (his share), deducted pre-tax by employer 2,400
In 2020, Aaron was reimbursed $2,300 by his insurance company for the medical expenses attributable to the skiing accident.
a. | Compute Aaron’s deduction for medical expenses in 2019. Use the AGI percentage as given for the Covid-19 change to the 2019 medical expense deduction. |
b. | Assume that Aaron did itemize his deductions in 2019 and would have even if he HAD gotten the reimbursement in 2019 instead of in 2020. How much, if any, of the $2,300 reimbursement must be included in gross income in 2020? |
c. | If Aaron did not itemize his deductions in 2019, how much of the $2,300 reimbursement would be included in gross income in 2020? |
d. | New scenario: If total medical expenses were $12,500 and Aaron received a reimbursement of $8,500 in 2019, what would Aaron's total medical expense deduction be in 2019? Use the AGI percentage as given for the Covid-19 change to the 2019 medical expense deduction. |
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