DEDUCTIONS AND LOSSES: CERTAIN ITEMIZED DEDUCTIONS
SOLUTIONS TO ASSIGNED PROBLEMS
include as medical expenses the following items that were incurred for
the general improvement of her health:
$840 dues at a health club incurred for the purpose of improving her general physical
$240 for multiple vitamins and antioxidant vitamins.
She may include as medical expenses the $500 cost of the smoking cessation program,
include the $240 cost of the nonprescription nicotine gum. While the cost of
nonprescription drugs is generally not deductible, the $600 spent on insulin is deductible.
Funeral expenses of $7,200 do
qualify as medical expenses.
pp. 10-3, 10-4, and Exhibit 10-1
A medical expense does not have to relate to a particular ailment to be deductible. The
definition of medical care is broad enough to cover preventive measures. Consequently,
the cost of periodic physical and dental exams qualifies even though the taxpayer is in
good health. Also, the cost of the treatment to stop smoking can be included in medical
expenses. Costs incurred in a weight loss program related to obesity may be includible in
medical expenses if within the IRS guideline. pp. 10-3, 10-4, and Exhibit 10-1
David, who is self-employed, may deduct 100% of the premium of $7,500 as a deduction
AGI. Joan, who is an employee, may include the premiums of $8,000 she paid in
computing her itemized deduction for medical expenses (subject to the 7.5% floor).
TAX FILE MEMORANDUM
February 26, 2009
Emma Doyle’s medical expense deduction
Emma Doyle’s medical expense deduction is $8,950, determined as follows:
Medical insurance premiums
Doctor and dentist bills for Bob and April
Doctor and dentist bills for Emma
Prescription medicines for Emma
Nonprescription insulin for Emma
Total medical expenses
7.5% of $100,000 (AGI)