Alice J. and Bruce M. Byrd are married taxpayers who file a joint return. Their Social Security numbers are 123-45-6789 and 111-11-1111, respectively. Alice's birthday is September 21, 1971, and Bruce's is June 27, 1970. They live at 473 Revere Avenue, Lowell MA 01850. Alice is the office manager for Lowell Dental Clinic, 433 Broad Street, Lowell, MA 01850(employer identification number 98-765432). Bruce is the manager of a Super Burger fast-food outlet owned and operated by Plymouth Corporation, 1247 Central Avenue, Hauppauge, NY 11788(employer identification number 11-1111111).The following information is shown on their Wage and Tax Statements (Form W-2) for 2018.

Line

Description

Alice

Bruce

1

Wages, tips, other compensation

$58,000

$62,100

2

Federal income tax withheld

$4,500

$5,300

3

Social security wages

$58,000

$62,100

4

Social security tax withheld

$3,596

$3,850

5

Medicare wages and tips

$58,000

$62,100

6

Medicare tax withheld

$841

$900

7

State

Massachusetts

Massachusetts

8

State wages, tips, etc.

$58,000

$62,100

9

State income tax withheld

$2,950

$3,100

The Byrd's provide over half of the support of their two children, Cynthia (born January 25, 1994, Social Security number 123-45-6788) and John (born February 7, 1998, Social Security number 123-45-6786). Both children are full-time students and live with the Byrds except when they are away at college. Cynthia earned $6,200 from a summer

internship in 2018, and John earned $3,800 from a part-time job.

The Byrd's had the following expenses relating to their personal residence during 2018:

Property taxes $5,000

Qualifies interest on home mortgage $8,700

Repairs of roof$5,750

Utilities $4,100

Fire and theft insurance $1,900

The following facts relate to medical expenses for 2018:

Medical insurance premiums $4,500

Doctor bill for Sam incurred in 2017 and not paid until 2018 7,600

Operation for Sam 8,500

Prescription medicines for Sam 900

Hospital expenses for Sam 3,500

Reimbursement from insurance company, received in 2018 3,600

The medical expenses for Sam represent most of the 60% that Bruce contributed to-

ward his father's support.

Other relevant information follows:

When they filed their 2017 state return in 2018, the Byrds paid additional state

income tax of $900.

During 2018, Alice and Bruce attended a dinner dance sponsored by the Lowell

Police Disability Association (a qualified charitable organization). The Byrds paid

$300 for the tickets. The cost of comparable entertainment would normally be $50.

The Byrds contributed $5,000 to Lowell Presbyterian Church and gave used clothing

(cost of $1,200 and fair market value of $350) to the Salvation Army. All donations

are supported by receipts, and the clothing is in very good condition

Via a crowdfunding site, Alice and Bruce made a gift to a needy family who lost their home in a fire ($400). In addition, they made several cash gifts to homeless individuals downtown - estimated to be $65.

In 2018, the Byrds received interest income of $2,750, which was reported on a Form

1099-INT from Second National Bank.

The home mortgage interest was reported on form 1098 by the bank. The mortgage (outstanding balance of $425,000 as of 1/1/18 was taken out by the Byrds on 5/1/14.

Alice's employer requires that all employees wear uniforms to work. During 2018,

Alice spent $850 on new uniforms and $566 on laundry charges.

Bruce paid $400 for an annual subscription to the Journal of Franchise Management and $741 for annual membership dues

Neither Alice's nor Bruce's employer reimburses for employee expenses.

The Byrds do not keep the receipts for the sales taxes they paid and had no major

purchases subject to sales tax.

All members of the Byrd family had health insurance coverage for all of 2018

This year the Byrds gave each of their children $2,000 which was then deposited into Roth IRAs.

Alice and Bruce paid no estimated Federal income tax. Neither Alice nor Bruce

wants to designate $3 to the Presidential Election Campaign Fund.

QUESTION:

Part 1Tax Computation

Compute net tax payable or refund due for Alice and Bruce Byrd for 2018. If they have overpaid they want a refund sent to them. Show tax computations and fill out the appropriate 1040 forms.