Question
Assume that medical expenses are only deductible to the extent they exceed 7.5% of an individuals adjusted gross income. Assume that Joe gets an annual
Assume that medical expenses are only deductible to the extent they exceed 7.5% of an individuals adjusted gross income. Assume that Joe gets an annual salary of $250,000, he has no other income and he has no deductions that are above the line. The only deduction that he has below the line are medical expenses. His medical expenses are $50,000. His boss wants to help him out because he had so many medical costs during the year that in addition to his regular salary, she will give him a bonus of $25,000. How much will his taxable income increase due to the $25,000 bonus?
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