Income Tax Solutions Chapter 5

Income Tax Solutions Chapter 5 - 65 Chapter 5 Personal...

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65 Chapter 5 Personal Itemized Deductions Teaching Suggestions To help students understand the importance of AGI in determining the itemized deductions described in Chapter 5, assist them in developing a list of the various AGI limitations imposed on these deductions. The list should include: Medical expenses . ............................................ 7.5% Charitable contributions . ................................ 50%, 30%, 20% Casualty losses . .............................................. 10% Overall limitation . ............................................. 2% Miscellaneous itemized deductions (next chapter) . ................... 2% Solutions to Questions and Problems 1. ¶503. Prescription drugs . ....................................................... 400 Doctors and insurance premiums . ........................................... 1,170 Other medical expenses: Hearing aid . ............................................. $525 Eyeglasses. .............................................. 130 655 $ 2,225 Less: 7.5% AGI ($24,000 × 7.5%). ................................ (1,800) Medical and dental expense deduction . .......................... $ 425 2. a. Deductible Item Deductible? Amount 1. Health insurance premium . ............................ Yes $ 386 2. Life insurance premium . ............................... No 0 3. Accident insurance. ................................... No 0 4. Acne cream . ........................................ No 0 5. Prescription drugs . ................................... Yes 300 6. Vitamins . ........................................... No 0 7. Cosmetics. .......................................... No 0 8. Dr. Wall, DDS . ...................................... Yes 120 9. Health spa dues . ..................................... No 0 10. X-ray examination . ................................... Yes 60 11. City Hospital. ........................................ Yes 375 12. Eyeglasses . ......................................... Yes 125 13. Cemetery plot. ....................................... No 0 14. Medical: 1,000 miles × $.20/mile . ........................ Yes 200
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This note was uploaded on 04/28/2008 for the course ACCT 210 taught by Professor Lloyd during the Spring '08 term at Lock Haven.

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Income Tax Solutions Chapter 5 - 65 Chapter 5 Personal...

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