Fred and Lucy Are Married and Together Have AGI of $120,000

question 8

Multiple Choice

Fred and Lucy are married and together have AGI of $120,000 in 2012.They have four dependents and file a joint return.They pay $5,000 for a high deductible health insurance policy and contribute $2,600 to a qualified Health Savings Account.During the year, they paid the following amounts for medical care: $9,200 in doctor and dentist bills and hospital expenses, and $3,000 for prescribed medicine and drugs.In October 2012, they received an insurance reimbursement of $4,400 for the hospitalization.They expect to receive an additional reimbursement of $1,000 in January 2013.Determine the maximum deduction allowable for medical expenses in 2012.

• A)$1,100.
• B)$3,800.
• C)$9,200.
• D)$12,800.
• E)None of the above.

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Definitions:

Physiological Needs

Basic physical requirements for human survival, such as food, water, and shelter, which are essential for maintaining life.

Motivation

The driving force behind individuals' actions, desires, and needs to achieve goals.

Consistently

Displaying steadiness and uniformity in actions, values, methods, measures, principles, or outcomes.

Maslow's Hierarchy

Maslow's Hierarchy is a psychological theory that ranks human needs in a pyramid, from basic physiological needs to self-actualization, emphasizing the importance of fulfilling foundational needs first.