Chloe is single, a U.S. citizen, and has a valid Social Security number. No one else lives in the household with her. She turned 50 in 2023. 

Chloe worked full time. Her total income from wages is $53,000. She has no other income. She is covered by a retirement plan at work.

Chloe contributed $6,000 to her traditional IRA in 2023.

Chloe owns her home in the U.S. where she lived as her principal residence all year. She made the

following energy efficient improvements to her home in 2023. These purchases meet the energy efficiency and other requirements to claim the energy efficient home improvement credit:

o $300 on a home energy audit

o $2,500 on new windows

o $6,000 on a new natural gas hot water boiler

5. Chloe can claim $1,200 as qualified expenses for the energy efficient home improvement credit.

a. True

b. False

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Interview Notes

Luther, age 54, and Lexi, age 56, are married and file a joint return.

Lexi has family coverage through her High Deductible Health Plan (HDHP) at work. In 2023, Lexi

contributed $2,350 to her Health Savings Account (HSA). Luther made contributions totaling $3,000 to his HSA in 2023.

Luther's Form 1099-SA shows a distribution from his HSA of $3,000. They have receipts showing they paid:

o $300 for new eyeglasses for Lexi,

o $2,200 in copays for doctor visits and tests,

o $400 for over the counter medication, and

o $100 for Personal Protective Equipment (PPE) to prevent the spread of COVID-19 and home COVID-19 tests

In April 2023, Luther was diagnosed by his physician with a terminal illness. In May, Luther and Lexi decided to take a luxury vacation before his health deteriorated. They used a distribution from Luther's IRA to pay for it. They received a Form 1099-R showing $15,000 in Box 1, and code 1 in Box 7.

Lexi sold a used handbag on an online marketplace. She received a Form 1099-K reporting the $700 sale. She originally paid $1,000 for the bag.

Luther and Lexi are U.S. citizens with valid Social Security numbers.

6. To maximize their HSA deduction, Lexi and Luther can make additional contributions of $3,400 total into their HSA accounts

a. True

b. False