What is the maximum percentage of Mary’s medical expenses that can be deducted given her AGI?

The correct answer is 7.5%. This percentage is significant in the context of tax deductions for medical expenses, as it represents the threshold that taxpayers must exceed in order to deduct those expenses from their taxable income.

For tax years up to and including 2023, taxpayers can only deduct the amount of their unreimbursed medical expenses that exceeds 7.5% of their adjusted gross income (AGI). This means that if Mary's AGI is, for instance, $50,000, she would need to have medical expenses that total more than $3,750 (which is 7.5% of her AGI) in order to start claiming amounts above this threshold as deductions.

The specifics of how this threshold applies highlight the importance of understanding AGI and its impact on the ability to deduct medical expenses, as well as knowing the percentage that defines the limit under current tax regulations. The tax code can evolve, so it is critical to stay updated on what the applicable limits are during a given tax year.