Simpson, age 45, is a single individual who is employed full-time by Duff Corporation. This year Simpson reports AGI of $73,400 and has incurred the following medical expenses Dentist charges Physician charges Optical charges Cost of eyeglasses Hospital charges Prescription drugs Over-the-counter drugs Medical insurance premiums $1,650 2,300 710 400 2,400 430 740 (not through an exchange 1,025 Problem 6-34 Part-a a. Calculate the amount of medical expenses that will be included with Simpson's itemized deductions after any applicable limitations Medical expenses b. Suppose that Simpson was reimbursed for $250 of the physician's charges and $1,200 for the hospital costs. Calculate the amount of medical expenses that will be included with Simpson's itemized deductions after any applicable limitations Medical expenses 2018 Tax Rate Schedules Individuals Schedule X-Single Schedule Z-Head of Household If taxable Income is over: If taxable Income is over: But not But not The tax is: The tax is: over: over: 0 $ 9,525 10% of taxable income $952.50 plus 12% of the excess over $9,525 $4,453.50 plus 22% of the excess over $38,700 $14,089.50 plus 24% of the excess over $82,500 $32,089.50 plus 32% of the excess over $157,500 $45,689.50 plus 35% of the excess over $200,000 $150,689.50 plus 37% of the excess over $500,000 0 $ 1 3,600 $ 9,525 $ 38,700 $ 82,500 $157.500 $200,000 500,000 $.38,700 $ 82,500 $157,500 $200.000 $500,000 $. 13,600 $ 51.800 $ 82,500 $157.500 $200,000 $500,000 $ 51,800 $ 82.500 $157,500 $200.000 $500,000 10% of taxable income $1,360 plus 12% of the excess over $13,600 $5,944 plus 22% of the excess over $51,800 $ 12,698 Plus 24% of the excess over $82,500 $30,698 Plus 32% of the excess over $157,500 $44,298 plus 35% of the excess over $200,000 $149,298 plus 37% of the excess over $500,000 - Schedule Y-1-Married Filing Jolntly or Qualifying Widow(er) Schedule Y-2-Married Fling Separately If taxable income is over: But not If taxable income is over: But not over: The tax is: over: The tax is: 0 $ 9,525 10% of taxable income $952.50 plus 12% of the excess over $9,525 $4,453.50 plus 22% of the excess over $38,700 $14,089.50 plus 24% of the excess over $82,500 $32,089.50 plus 32% of the excess over $157.500 $45,689.50 plus 35% of the excess over $200,000 $80,689.50 ous 37% of the excess over $300,000 0 $. 1 9,050 $. 19,050 $. 77,400 $165,000 $315,000 $400,000 $600,000 $. 77,400 $165,000 $315,000 $400,000 $600,000 10% of taxable income $1,905 plus 12% of the excess over $19.050 $8,907 plus 22% of the excess over $77,400 $28,179 plus 24% of the excess over $165,000 $64,179 plus 32% of the excess over $315,000 $91,379 plus 35% of the excess over $400,000 $161,379 plus 37% of the excess over $600,000 $ 9,525 $. 38,700 $. 82,500 $157,500 $200,000 $300,000 $38,700 $ 82,500 $157,500 $200,000 $300,000 - Estates and Trusts If taxable income is over But not over The tax is: $ $2,550 $ 9,150 0 $2,550 $ 9,150 $12,500 10% of taxable income $255 plus 24% of the excess over $2,550 $1,839 plus 35% of the excess over $9,150 $3,011 50 plus 37% of the excess over $12,500 $12,500 Tax Rates for Net Capital Gains and Qualified Dividends Rate Taxable Income Head of Household Married Married Filing Separately Trusts and Estates Filing Jointly Single 0% 15% 20% 0 $77,200 $77,201 _ $479,000 $479,000+ $0-$38,600 $38,601-$239,500 $239,500+ $0-$38,600 $38,601 _ $425,800 $425,801+ $0 $51,700 $51.701-$452.400 $452,401+ $0- $2,600 $2.601-$12.700 $12,701+ This rate applies to the net capital gains and qualified dividends that fall within the range of taxable income specified in the table (net capital gains and quali- fied dividends are included in taxable income last for this purpose) Basic Standard Deduction Amounts Amount of Each Additional Standard Deduction for Taxpayers Who Are Age 65 or Blind 2017 Amount 2018 Amount $24,000 $24,000 $12,000 $18,000 $12,000 Filing Status 2017 2018 Amount Amount $1,250$1,300 Single taxpayer or head of household$1,550 $1,600 $12,700 Married Filing Jointly Qualifying Widow or Widower$12,700 Married Filing Separately Head of Household Single Married taxpayers 6,350 9,350 6,350 Exemption Amount For individuals claimed as a dependent on another return, the 2018 stan- dard deduction is the greater of (1) $1,050 or (2) $350 plus earned income not to exceed the standard deduction amount of those who are not dependents. 2017 2018 $4,050 $4,150 Used for qualifying relative gross income test. Corporations Rate Taxable Income 21% All