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Tax Topic 4 - Claiming Medical and Dental Expenses

In figuring the medical and dental expenses deduction you will learn which expenses and whose expenses you can claim on your tax return. You can include in your medical expense deduction the cost of diagnosis, cure, mitigation, treatment, or prevention of disease including the costs of equipment and devices needed for these. This topic will help you understand the itemized deduction for medical and dental expenses.  Medical expenses would not include items that are for the general health as with vitamins.

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Student Instructions:

Print this page, work on the questions and then submit test by mailing the answer sheet or by completing quiz online.

Instructions to submit quiz online successfully: Step-by-Step check list

Answer Sheet            Quiz Online

Most forms are in Adobe Acrobat PDF format. Get Adobe ReaderYou will need Adobe Reader to view and print these forms. If you do not already have Adobe Reader installed on your computer, you may download the software for free.

 

Use IRS Publication 502, Form 1040 Instructions (Form 1040 instructions only up to page 98) and Schedule A (1040) instructions to complete this tax topic.

Please note: Form 1040 Instructions (Form 1040 instructions only up to page 98) will be used for the rest of the topics in the initial tax preparer certification course. You will be responsible to answer questions from the Form 1040 instructions booklet (up to page 98) on every topic so read it carefully.

Tax Return Situation 1:

Prepare a Federal Form 1040  return for Rodolfo Ramirez (DOB 7/30/1967). Also fill out a  Schedule A (Form 1040). Rodolfo is married and his wife is Anna Ramirez (Anna's SSN 505-57-9464 DOB 1/20/1968).

Medical Expenses for Anna:
bullet $375 for prescription medicines and drugs
bullet $337 for hospital bills
bullet $439 for doctor bills
bullet $295 for hospitalization insurance
bullet $380 for medical and surgical insurance
bullet $33 transportation for medical treatment

Additionally, Rodolfo paid Anna's medical bill in the amount of $1,300 for medical treatment she received before they got married.

Medical Expenses for Lucia Lopez (SSN 020-20-5678 - Anna's mother):

bullet $300 for doctors
bullet $300 for insulin
bullet $175 for eyeglasses

Lucia Lopez lived with the Ramirez for more than half of 2013 and received total support from the Ramirez family. However, she filed a joint return with her husband. Lucia and her husband had taxable income of $2,450 and after their tax of $246 they still received a refund of $534.

Medical Expenses for Beatriz Ramirez (SSN 602-20-2031 - Rodolfo's sister):

bullet $450 for doctors
bullet $350 for prescription medicines and drugs

Beatriz lived with Rodolfo and Anna for more than half of 2013 and received total support from them. However, Beatriz worked as a waitress and earned $11,000 from her job.

Additional expenses for the Ramirez Family:

bullet Real estate taxes $950
bullet Other taxes (DMV tax, tax part only) $500
bullet Home Mortgage Interest $9,860
bullet Union dues $700
bullet Tax Preparation fee $207

Rodolfo purchased a new motor vehicle on March 15, 2013, for $56,500 before taxes. He paid 4% sales tax on the purchase. Additionally, Rodolfo kept receipts for sales taxes paid on other items such as clothing and furniture and the total sales tax for these were $370.

Rodolfo contributed 12% of his gross wages to his religious organization: Downtown Church, 5647 Santee Court, Aberdeen, SD 57401.

Rodolfo contributed $4,000 to an IRA.

 

Get basic information from the following W2, including income information.  Have their return prepared and ready to answer the questions.
 

Tax Return Situation 2:

Prepare a Federal Form 1040  return for Mukesh (DOB 2/27/1975). Also fill out a  Schedule A (Form 1040).

He had the following medical expenses for the year:

Doctor $6,750.00
Dentist $3,280.00
Prescription Medicine $1,480.00

Mukesh was diagnosed by his physician with a heart disease. His doctor advised Mukesh to enroll in a gym. Mukesh paid $45 per month in 2013 for the gym membership.

Mukesh drove 1,879 miles for medical reasons from January - June 2013 and 1,000 miles from July through December 2013. He spent $600 in gas, $38 for oil, and $110 for tolls and parking.

Get their personal information from the following W2, including address and income information. 

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Complete the following questions after you have complete the above tax returns:

1. Look at the Form 1040 you prepared for Rodolfo and Anna. What is the amount on Form 1040, Line 7?

A. $9,530.
B. $32,143.
C. $11,400. 
D. $9,816.

2. Look at the Form 1040 you prepared for Rodolfo and Anna. What is the amount on Form 1040, Line 32?

A. $12,961.
B. $13,501.
C. $4,000. 
D. $0.

3. Look at the Form 1040 you prepared for Rodolfo and Anna. What is the amount on Form 1040, Line 38?

A. $28,143.
B. $32,143.
C. $11,400. 
D. $9,816.

4. Look at the Form 1040 you prepared for Rodolfo and Anna. What is the amount on Form 1040, Line 40?

A. $9,530.
B. $20,849.
C. $11,400. 
D. $9,816.

5. Look at the Form 1040 you prepared for Rodolfo and Anna. What is the amount on Form 1040, Line 41?

A. $9,530.
B. $7,719.
C. $7,294. 
D. $9,816.

6. Look at the Form 1040 you prepared for Rodolfo and Anna. What is the amount on Form 1040, Line 43?

A. $9,530.
B. $9,763.
C. $319. 
D. $0.

7. Look at the Form 1040 you prepared for Rodolfo and Anna. What is the amount on Form 1040, Line 44?

A. $31.
B. $9,763.
C. $11,400. 
D. $0.

8. Look at the Form 1040 you prepared for Rodolfo and Anna. What is the amount on Form 1040, Line 62?

A. $9,530.
B. $9,763.
C. $2,461. 
D. $9,816.

9. Look at the Form 1040 you prepared for Rodolfo and Anna. What is the amount on Form 1040, Line 73?

A. $2,461.
B. $2,430.
C. $11,400. 
D. $9,816.

10. Look at the Form 1040 you prepared for Rodolfo and Anna. What is the amount on Form 1040, Line 74a?

A. $9,530.
B. $2,461.
C. $2,430. 
D. $9,816.

11. Look at the Form 1040 you prepared for Mukesh. What is the amount on Form 1040, Line 7?

A. $29,064.
B. $9,763.
C. $11,400. 
D. $9,816.

12. Look at the Form 1040 you prepared for Mukesh. What is the amount on Form 1040, Line 22?

A. $9,530.
B. $29,064.
C. $11,400. 
D. $9,816.

13. Look at the Form 1040 you prepared for Mukesh. What is the amount on Form 1040, Line 38?

A. $9,530.
B. $9,763.
C. $29,064. 
D. $9,816.

14. Look at the Form 1040 you prepared for Mukesh. What is the amount on Form 1040, Line 40?

A. $10,078.
B. $9,763.
C. $11,400. 
D. $9,816.

15. Look at the Form 1040 you prepared for Mukesh. What is the amount on Form 1040, Line 41?

A. $9,530.
B. $10,078.
C. $18,986. 
D. $9,816.

16. Look at the Form 1040 you prepared for Mukesh. What is the amount on Form 1040, Line 42?

A. $9,530.
B. $18,491.
C. $3,800. 
D. $9,816.

17. Look at the Form 1040 you prepared for Mukesh. What is the amount on Form 1040, Line 43?

A. $15,186.
B. $18,491.
C. $11,400. 
D. $9,816.

18. Look at the Form 1040 you prepared for Mukesh. What is the amount on Form 1040, Line 44?

A. $9,530.
B. $1,791.
C. $1,841. 
D. $9,816.

19. Look at the Form 1040 you prepared for Mukesh. What is the amount on Form 1040, Line 62?

A. $9,530.
B. $18,491.
C. $2,121. 
D. $9,816.

20. Look at the Form 1040 you prepared for Mukesh. What is the amount on Form 1040, Line 73?

A. $330.
B. $280.
C. $1,841. 
D. $2,121.

 
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Revised: 11/26/17