Reference no: EM133553886
Case Scenario 1
This year Diane intends to file a married-joint return. Diane received $187,700 in salary and paid $7,200 of interest on loans to pay qualified tuition costs for her dependent daughter, Deb. This year Diane has also spent moving expenses of $5,250 and $28,400 of alimony to her ex-spouse, Jack, who divorced in 2013.
Note: Round your intermediate calculations and final answer to the nearest whole dollar amount.
a. What is Diane's adjusted gross income?
b. Suppose that Diane also reported an income of $9,700 from a half share of profits from a partnership. Disregard any potential self-employment taxes on this income. What AGI would Diane report under these circumstances?
Case Scenario 2
Simpson, age 45, is a single individual employed full time by Duff Corporation. This year Simpson reports AGI of $61,600 and has incurred the following medical expenses:
| Dentist charges |
$ 1,560 |
| Physician charges |
1,980 |
| Optical charges |
815 |
| Cost of eyeglasses |
430 |
| Hospital charges |
4,200 |
| Prescription drugs |
610 |
| Over-the-counter drugs |
720 |
| Medical insurance premiums (not through an exchange) |
985 |
a. Calculate the medical expenses included with Simpson's itemized deductions after any applicable limitations.
b. Suppose that Simpson was reimbursed for $450 of the physician's charges and $3,300 for the hospital costs. Calculate the medical expenses included with Simpson's itemized deductions after any applicable limitations.