Complete Question:
Jon is a cash-basis taxpayer and has adjusted gross income of $40,000 in 2018. During the year he incurred and paid the following medical expenses.
Drugs and medicines prescribed by doctors $300
Health insurance premiums $750
Doctors' fees $2,250
Eyeglasses $75
How much medical expense can he deduct as itemized deduction?
Answer:
Jon
Medical expense that Jon can deduct as itemized deduction:
= $375
Explanation:
a) Data and Calculations:
Adjusted gross income = $40,000
Incurred medical expenses:
Drugs and medicines prescribed by doctors $300
Health insurance premiums $750
Doctors' fees $2,250
Eyeglasses $75
Total = $3,375
Under Tax Cuts and Jobs Act (TCJA), the medical expenses which can be deducted as an itemized deduction on the federal income tax return are only to the extent that they exceed 7.5% of adjusted gross income (AGI).
7.5% of $40,000 = $3,000
Therefore, Jon can itemize deduction of $375 in medical expense.
Answer:
Final Value= $61,037.04
Explanation:
Giving the following information:
Investment= $2,378 in a bank at the end of every year for 10 years.
The company makes no deposits during the subsequent 5 years.
Interest rate= 10%
First, we need to calculate the first 10 years.
FV= {A*[(1+i)^n-1]}/i
A= annual deposit
FV= {2,378*[(1.1^10)-1]} / 0.1
FV= $37,899.20
Now, the 5 years:
FV= PV*(1+i)^n
FV= 37,899.2*(1.1^5)
FV= $61,037.04
Answer:
Total increase in pretax earnings on Summer’s December 31, 2019, income statement is $20,253
Explanation:
Fair value of asset sold on lease = Present value of lease payments = $50,000 * Cumulative PV factor at 6% for 8 periods of annuity due
= $50,000 * 6.20979
= $310,490
Interest income for 2019 = ($310490 - $50,000) * 6% = $15,629
Total increase in pretax earnings on Summer’s December 31, 2019, income statement = $310490 - $300,000 + $15,629 - 5866 = $20,253
