The annualized income installment method is exactly like it sounds on the tin: it allows taxpayers to annualize tax for each period based on an estimate of income and deductionsratherthan in equal installments.
Also, they gave him good marks for keeping thorough records, but they saw the goal of his record keeping to be focused on substantiation of tax deductionsratherthan on getting good information to correct his business plan.
Ratherthan simply doing away with the deductions that caused the problems and reforming the rates to maintain progressivity, Congress thought a much more convoluted solution was just what the doctor ordered, adding an additional layer of complexity that has plagued the tax system since its inception.
Medical expenses are deductible on a Schedule A if you itemize your deductions (only about one-third of all taxpayers will opt to itemize ratherthan claim the standard deduction).