3. Tax Problem:
Simpson is a single individual who is employed full-time by Duff Corporation. The year Simpson reports AGI of $50,000 and has incurred the following medical expenses:
| Dentist charges | $ 900 |
| Physician’s charges | 1,800 |
| Optical charges | 500 |
| Cost of eyeglasses | 300 |
| Hospital charges | 2,100 |
| Prescription drugs | 250 |
| Over-the-counter drugs | 450 |
| Medical insurance premiums | 775 |
Calculate the amount of medical expenses that will be included with Simpson’s itemized deductions after any applicable limitations. Use the 2013 tax year information for reference.
