In 2021, Angela sustains serious injuries from a snow-skiing accident. (Click the icon to view the 2021 tax data.) (Click the icon to view the 2021 itemized deductions.) (Click the icon to view the 2021 taxable income.) In 2022, Angela receives an additional $7,000 in a settlement of a lawsuit arising because of the snow-skiing accident. $4,000 of the settlement is to pay Angela's medical bills, and $3,000 is to reimburse her legal expenses. (Click the icon to view the standard deduction schedule.) Requirement What is the proper tax treatment of this $7,000 settlement? Begin by determining the excess medical expenses and the total itemized deductions with the settlement. Medical expenses Less Next 2021 taxable income.) In 2022, Angela receives an additional $7,000 in a settlement of a lawsuit arising because of the snow-sking accident. $4,000 of the settlement is to pay Angela's medical bills, $3,000 is to reimburse her legal expenses. (Click the icon to view the standard deduction schedule.) Requirement What is the proper tax treatment of this $7,000 settlement? Now calculate the tax benefit of this $7,000 settlement. Minus: Deductions from AGI: Taxable income (assuming reimbursement was received in 2021) Minus: Tax benefit ah additional $7,000 in a settlement of a lawsuit arising because of the snow-skiing accident. $4,000 of the settlement is to pay Angela's mede $3,000 is to reimburse her legal expenses. (Click the icon to view the standard deduction schedule.) Requirement What is the proper tax treatment of this $7,000 settlement? Taxable income (assuming reimbursement was received in 2021) Minus: Tax benefit What is the proper tax treatment of this $7,000 settlement? Angela must include legal fees in her gross income in 2022 because of the reimbursement. The reimbursement for the income to Angela because f prt sc delete Next i More info i In 2 $3, In 2021, Angela incurred the following expenses: Re Wh Ta Mid Tax Wh An leg Item Doctor bills Hospital bills Amount $ 11,700 9,400 3,000 Legal fees in suit against ski resort Angela is single and has no dependents. For the year, her salary is $58,000. She pays $600 in medical and dental insurance premiums, which is withheld from her paycheck on an after-tax basis, $6,750 in mortgage interest on her home, and $1,200 in interest on her car loan. Her health insurance provider reimburses her for $10,000 of the medical expenses. Print Done Player.aspx?cultureld-en-us&theme: accountingBestyle-highered&disable StandbyIndicator=true&assignmentHandleslocale=true - X settlement is to pay Angela's me K In 2021, Angela su More info i (Click the icon i (Click the icon In 2022, Angela re $3,000 is to reimbu (Click the icon Requirement What is the proper Doctor bills Hospital bills Taxable income (a Minus: Tax benefit What is the proper Angela must includ legal fees - X 11,700 9,400 ht. $4,000 of the settlement is to pay Angela's ma Medical and dental insurance 600 Medical expenses $ 21,700 Less Reimbursement (10,000) 7.5% percent of AGI (4,350) Deductible medical expenses $ 7,350 6,750 Mortgage interest Total itemized deductions $ 14,100 Print Done ment for the (Click the icon to In 2022, Angela rece $3,000 is to reimburs (Click the icon to Requirement More info Adjusted gross income (AGI)) What is the proper ta Minus: Deductions from AGI: Itemized deductions Taxable income Taxable income (ass Minus: Tax benefit What is the proper ta Angela must include legal fees income to Angela because Print Done mized deductions 58,000 (14,100) $ 43,900 - X ent. $4,000 of the settlement is to pay Angela's in her gross income in 2022 because of the reimbursement. The reimbursement for the Schedule of Standard Deductions STANDARD DEDUCTION Filing Status Married individuals filing joint returns and surviving spouses Heads of households Unmarried individuals (other than surviving spouses and heads of households) Married individuals filing separate returns Additional standard deduction for the aged and the blind; Individual who is married and surviving spouses Additional standard deduction for the aged and the blind; Individual who is unmarried and not a surviving spouse Taxpayer claimed as dependent on another taxpayer's return: Greater of (1) earned income plus $350 or (2) $1,100. * These amounts are $2,700 and $3,400, respectively, for a taxpayer who is both aged and blind $ 25,100 $ 18,800 $ 12,550 $ 12,550 $1,350 $1,700 Print Done - X pay Angela's medie