Question

Select the correct answer.
Amanda works as an industrial designer. Her Adjusted Gross Income (AGI) is $60,000. Due to an emergency, she had to spend $6,500 on medical expenses. Is she eligible for a tax deduction, and if so, how much?

Answer 1

Economic activity by men and women

Answer 2

Yes, Amanda is eligible for a tax deduction. This is because her medical expense of $6,500 does exceed 7.5% of her adjusted gross income of $60,000.

7.5% of $60,000= $4,500.

$6,500, the amount she used for her medical expenses is above $4,500.

According to the law, she is allowed to claim any medical expenses that are above 7.5%of her adjusted gross income annually.

Her tax deduction amount is the balance above the 7.5% limit. Therefore her deduction amount will be:

$6500-$4500= $2,000