Question
Zunilda is 77-year-old individual with an AGI of $25,000 in 2016. She began living in a nursing home in 2016 upon the recommendation of her
Zunilda is 77-year-old individual with an AGI of $25,000 in 2016. She began living in a nursing home in 2016 upon the recommendation of her primary care physician in order to receive medical care for a specific condition. She had the following unreimbursed expenses in 2016:
Expense Amount Nursing home health care costs $5,000
Nursing home meal and lodging costs 8,000
Figured it out,
The $1,500 cost of prescription drugs and the $5,000 of nursing home health care costs would be included in Zunilda's medical expenses. When a taxpayer resides in a nursing home due to needed medical care, as is the case, the cost of meals and lodging are also included, resulting in total medical expenses of $14,500. Taxpayers who are 65 or older reduce medical expenses by 7.5% of AGI to determine the deductible amount. As a result, Zunilda may deduct $14,500 7.5% x $25,000 ($1,875) for a deduction of $12,625.
Note: For taxpayers age 65 and older the threshold is 7.5 percent of AGI until 2017, when it increases to 10 percent
Prescription drugs 1,500
As a result of these unreimbursed expenses, how much may Zunilda deduct from AGI on her 2016 tax return? Assume Zunilda elects to itemize deductions.
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