Jay can deduct the amount over 7% of his gross income as medical
expenses on his income tax return. If his annual salary is $18,500 and
his medical expenses one year were $1,450, how much could he deduct on
his tax return?
a. $155
b. $1,193.50
c. $2,745
d. $1,295
First, we need to find 7% of Jay's annual salary:
0.07 x $18,500 = $1,295
Since his medical expenses for the year were $1,450, he can deduct the amount over $1,295:
$1,450 - $1,295 = $155
Therefore, the answer is (a) $155.