1. John is self-employed with income of $60,000. Mary makes $50,000 as a school teacher. Although Mary could carry John on her health insurance, John got his own cheaper policy for $4000 and put $1000 in his health savings plan. Mary spent $600 on school supplies for her students. Their income was $110,000 Their credits were John's Insurance -4000 Health Savings -1000 Educator Expense -600 self-employment tax -3720 Adjusted Gross Income $100680

Will they get audited? Why?

3. List four deductible taxes.

4. What is the requirement for deducting mortgage interest?