INDIVIDUAL INCOME TAX COURSE - SEE ATTACHED FOR QUESTION

Problem 52 Medical Expenses (LO 5.1) In 2015, Margaret and John Murphy (age 66 and 68, respectively) are married taxpayers who file a joint tax return with AGl of $26,500. During the year they incurred the following expenses: Medical insurance premiums $1,150 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 310 In addition, they drove 78 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. Note: If required, round any amount to the nearest dollar. Caution. Do not include expenses reimbursed or paid by others. Medical and Dental Expenses 1 2 3 Medical and dental expenses (see instructions) . . . . . . . . . . . . . . Enter amount from Form 1040, line 38. . . . . 3 1,988 Multiply line 2 by 10% (.10). But if either you or your spouse was 7.5% (.075) instead Feedback 2 26,500 born before January 2, 1951, multiply line 2 by 4 1 3,106 Subtract line 3 from line 1. If line 3 is more than line 1, enter 0 . . . . . . . . . . . . . . . . . . . . . . . . . . 4 1,910 Check My Work Most itemized deductions are personal expenses which Congress has deemed to be deductible for various social or economic policy purposes. Itemized deductions fall into six categories: medical, state and local taxes, interest, charitable contributions, casualty and theft losses, and miscellaneous deductions