Miki, Who Is Single and 57 Years Old, Has a Qualifying

question 128

Essay

Miki, who is single and 57 years old, has a qualifying high-deductible insurance plan.She had the following transactions with her HSA during the year:​ $\begin{array}{llcc} \text { Contributions to her HSA } &\$3,500 \\ \text { Interest income earned on her HSA } &9\\ \text { Medical expenses paid from her HSA } &5,739\\ \text { HSA distribution to pay for her daughter's wedding } &7,650\\\end{array}$

a.How much may Miki claim as a deduction for adjusted gross income?
b.What is the amount that Miki must report on her federal income tax return as income from her HSA?
c.How much is subject to a penalty? What is the penalty percentage?

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Definitions:

Fabricating Department

A part of manufacturing where raw materials are transformed into parts or products through processes like cutting, welding, and assembling.

Daily Basis

A period or measure referring to events or processes that occur or are calculated on a day-to-day basis.

Design Department

A division within a company responsible for developing new products or improving existing ones through research, planning, and design.

Labor Constraint

Is a restriction or limit within a production or project environment that pertains to the availability or efficiency of labor.