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? a. no; she is ineligible for a tax deduction b. yes; a tax deduction on the entire medical expense c. yes; a tax deduction on any amount spent above 10% of her agi d. no; her medical bill is less than 20% of her agi

The correct answer is c.

Explanation:

Amanda is eligible for tax deduction for medical expenses. But not for the full amount, because once your adjusted gross income is calculated, you can only deduct the amount that exceeds 10% of your adjusted gross income.

Since Amanda's adjusted gross income (AGI) is $60,000, 10% of this amount is $6000 and her medical expenses were $6500, she will only be able to deduct $500.

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The correct answer is Choice C.

Beginning Jan. 1, 2019, all taxpayers may deduct only the amount of the total unreimbursed allowable medical care expenses for the year that exceeds 10% of their adjusted gross income.

yes; a tax deduction on any amount spent above 10% of her AGI

Explanation:

Starting January 2019, al taxpayers that have medical expenses above 10% of their Adjusted Gross Income, are eligible for tax deduction for the amount of money that they spent over that 10% barrier, so for example for Amanda she is elegible for tax deduction oa the $500 extra she spent over the 6,000 which is 10% of her Adjusted Gross Income.

Yes, Amanda is eligible for tax deduction and the money is $4500.

As per the provision IRS allows to take medical deduction of 7.5% of the adjusted gross income if the medical expenses (eligible medical expenses) made during the year exceeds 10% of the Adjusted Gross Income.

In this case Amanda has paid $6500 for her medical expenses which exceeds 10% of her Adjusted Gross Income. Therefore, she is eligible to avail deduction 7.5% of her Adjusted Gross Income.  

Amount eligible for deduction = $60000 - 7.5% = $4500