Comprehensive Problem (Tax Return Problem). Rodney and Alice Jones have three small children, ranging in age from 5 to 10 . One child is blind and needs special care. Rodney works as an accountant for a large CPA firm and has gross income of \(\$ 45,000\). Alice is a lawyer with a national law firm and earns \(\$ 48,000\). Rodney's parents are quite old, and he and his wife fully support them.

Rodney's employer provides group-term life insurance at twice the employee's annual salary. Rodney is 40 years of age.

During 2018, Rodney and Alice receive the following dividends on their jointly held investments:

The Joneses have itemized deductions of \(\$ 25,000\). Compute their taxable income.

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Dividends from Mexico Inc. (Mexican Corp.) Dividends from Widget Steel Corp. They received interest income from the following investments: interest on State of Ohio highway bonds Interest on deposits in savings and loans $700 150 $800 400