Jennifer and Jason Greco are married and file a joint tax return. Their two dependent children (Jim, age 14 and Jessica, age 16); both live at home. The Grecos have the following income and expenses:

Income:

Jennifer's salary.........................................................$120,000

Jason's net profit from his sole proprietorship........................148,000

Interest income on State of Texas bonds...............................10,000

Interest income on corporate bonds.....................................12,000

Cash dividends............................................................19,000

Long-term capital gain from sale of stock.............................70,000

Expenses:

Interest on the $850,000 principal from their

home acquisition mortgage.............................................48,000

Real property taxes on their home......................................11,000

Charitable contributions to their church...............................49,000

Federal income tax withheld from Jennifer's salary.................35,000

Estimated federal tax payments for this year.........................30,000

a. What is their adjusted gross income and taxable income for 2016?

b. What is their net tax due or refund expected for 2016?

c. Using the total tax you computed in part b, what is their effective tax rate as a percentage of their adjusted gross income?