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11 December, 08:03

Herman is covered by a cafeteria plan by his employer. His adjusted AGI is $100,000. He paid unreimbursed medical premiums in the amount of $10, 500 and he itemizes deductions. What amount will Herman be able to deduct for his medical insurance premium expenses

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  1. 11 December, 10:44
    0
    Adjusted Gross Income = $100,000

    Unreimbursed medical premium = $10,500

    Amount deductable for his medical insurance premium should be equal to 7.5% of the AGI.

    7.5% of AGI

    7.5/100*$100,000

    0.075*100,000

    =$7,500 medical insurance expenses

    Total medical insurance premium deductable is

    $10,500-$7,500

    =$3000
  2. 11 December, 11:12
    0
    Your total medical expenses, including premiums, must surpass 7.5 percent of your adjusted gross income to be deductible.

    In this case, take his AGI and multiply by 7.5%. subtract that amount from the total medical expenses and you will have the amount that is deductible from his taxes.
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