Question

Randall had an AGI of $45,000. He had $1500 in medical expenses, paid $1356 in mortgage interest, and drove a company car for work. Which expense(s) can he itemize on his tax return?

Answer 1

MORTGAGE INTEREST ONLY

Answer 2

Of the three mentioned items, Randall would not be able to claim his medical expenses on his itemized portion of his taxes because they would need to be at least 10% of his AGI.

10% of $45000 is $4500.

His mortgage interest is deductible.

The vehicle expenses (not reimbursed by the company) that he incurs from driving the company car would be deductible. This would only be the amount over 2% of the AGI.

So, anything over 2% of $45000 (over $900 in gas, etc.. not reimbursed by the company) would be deductible.