This topic will help you understand the itemized deduction for medical and dental expenses. In figuring this 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. Medical expenses would not include items that are for the general health as with vitamins.

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

A. $ 9,530.
B. $ 9,763.
C. $ 10,900. 
D. $ 9,816.

2. Look at the Form 1040 you prepared for Mukesh and Sarita. What is the amount on Form 1040, Line 73a?

A. $ 193.
B. $ 143.
C. $ 888. 
D. $ -0-.

3. Maintenance or personal care services is care which has as its primary purpose the providing of a chronically ill individual with needed assistance with his or her disabilities (including protection from threats to health and safety due to severe cognitive impairment).

True False

4. You cannot include in medical expenses amounts paid for admission and transportation to a medical conference if the medical conference concerns the chronic illness of yourself, your spouse, or your dependent.

True False

5. Last year, Eduardo had $500 of medical expenses. He cannot deduct the $500 because it is less than 7.5% of his adjusted gross income. This year, Eduardo was reimbursed $400 of the medical expense. Eduardo

A. Needs to include $400 in his gross income.
B. Does not include $400 in his gross income.
C. Needs to include $500 in his gross income.
D. Needs to include $500 in his medical expenses deduction.

6. You can include medical expenses you paid for your spouse. To include these expenses, you must

A. Have been married to your spouse at the time your spouse received the medical services.
B. Have been married to your spouse at the time you paid the medical expenses.
C. Both A or B above.
D. None of the above.

7. Mary received medical treatment before she married Bill. Bill paid for the treatment after they married. Bill and Mary are filing separately. Bill

A. Can include these expenses in figuring his medical expense deduction.
B. Cannot include these expenses in figuring his medical expense deduction because he is filing separate returns.
C. Cannot include these expenses in figuring his medical expense deduction because Mary received medical treatment before she married Bill.
D. None of the above.

8.  This year, Gregorio paid medical expenses for his wife Rosita who died last year. Gregorio married Rosalinda this year and they file a joint return. Gregorio

A. cannot include Rosita's medical expenses in figuring his medical deduction for this year because he has remarried.
B. can include Rosita's medical expenses in figuring his medical deduction because he was married to Rosita when she received the medical services.
C. cannot include Rosita's medical expenses in figuring his medical deduction because he is no longer married to Rosita.
D. None of the above.

9. A person generally qualifies as your dependent for purposes of the medical expense deduction if

A. The person was a qualifying child.
B. The person was a qualifying relative.
C. The person was a U.S. Citizen or national or a resident of the U.S., Canada or Mexico.
D. All of the above.

10. Your adjusted gross income is $40,000, 7.5% of which is $3,000. You paid medical expenses of $2,500. You

A. Can deduct $2,500 of your medical expenses.
B. Can deduct $3,000 of your medical expenses. 
C. Can deduct $2,250 of your medical expenses.
D. Cannot deduct any of your medical expenses because they are not more than 7.5% of your adjusted gross income.

11. You and your three brothers each provide one-fourth of your mother's total support. Under a multiple support agreement, you treat your mother as your dependent. You paid all of her medical expenses. Your brothers prepaid you for three-fourths of these expenses. In figuring your medical expense deduction,

A. Your brothers can include all of the expenses because there are three of them.
B. You can include all of your mother's medical expenses in your medical expense deduction.
C. You can include only one-fourth of your mother's medical expenses. 
D. Your brothers can include three-fourths of these expenses.

12. Qualified medical expenses paid before death by the decedent are NOT deductible if paid with a tax-free distribution from any Archer MSA or health savings account.

True False

13. Xwaan has diabetes and uses a blood sugar test kit to monitor his blood sugar level. Xwaan can include the cost of the blood sugar test kit in his medical expense deduction.

True False

14. When figuring the amount of insurance premiums you CAN deduct on Schedule A, include any health coverage tax credit advance payments shown in box 1 of Form 1099-H, Health Coverage Tax Credit (HCTC) Advance Payments.

True False

15. You are a federal employee participating in the premium conversion plan of the Federal Employee Health Benefits (FEHB) program. Your share of the FEHB premium is paid by making a pre-tax reduction in your salary. Because you are an employee whose insurance premiums are paid with money that is never included in your gross income, you can deduct the premiums paid with that money.

True False

16. Xwanita drove $2,800 miles for medical reasons during the year. 1,400 miles from January 1st thorough June 30th and 1,400 miles from July 1st through December 31, 2008. She spent $250 for gas, $5 for oil and $50 for tolls and parking. She wants to figure the amounts she can include in medical expenses both ways to see which gives her the greater deduction. As a result, Xwanita includes

A. $644 of car expenses with her other medical expenses.
B. $305 she figured using actual expenses.
C. $694 she figured using mileage for the year.
D. $250 she spent for gas for the trip.

17. Last year Joe's niece was his dependent. This year she no longer qualifies as his dependent. However, he paid $800 this year for medical expenses she incurred last year when she was his dependent. Which of the following is correct?

A. Joe cannot include the $800 in figuring this year's medical expense deduction.
B. Joe can include the $800 in figuring this year's medical expense deduction.
C. Joe can postpone including the $800 in Medical expenses until his niece becomes his dependent again.
D. None of the above.

18. Which of the following is deductible as medical insurance:

A. Medical portion of auto insurance policy that provides coverage for all persons injured in or by your car because the part of the premium for you, your spouse and your dependents is not stated separately from the part of the premium for medical care for other.
B. Insurance policy that pays you $50 if you are unable to work due to illness or injury.
C. Medicare B
D. None of the above

19. John is a cash basis taxpayer. During the year he incurred the following expenses for himself and his son, Michael, whom he claims as a dependent on his return.

John's medical expense deduction before limitation is:

A. $1,700
B. $825
C. $900
D. $925

20. Which of the following will NOT be deductible as a medical expense?

A. The amount you pay for cosmetic surgery that is needed to correct a scar caused from an auto accident.
B. Modifying the hardware on doors which do not increase the value of the property.
C. Lowering the kitchen cabinets which do not increase the value of property.
D. $2,000 spent for building entrance and exit ramps which increased the value of the property by $10,000 as a result of the modifications. 

Copyright © 2009 [Hera's Income Tax School]. All rights reserved.
Revised: 08/08/11