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. Alices birthday is Sep- tember 21, 1966, and Bruces is June 27, 1965. They live at 473 Revere Avenue, Lowell, MA 01850. Alice is the office manager for Lowell Dental Clinic, 433 Broad Street, Low- ell, MA 01850 (employer identification number 98-7654321). Bruce is the manager of a Super Burgers 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 W2) for 2013.

Description Alice Bruce 1 Wages, tips, other compensation $58,000 $62,100 2 Federal income tax withheld 4,500 6,300 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 15 State Massachusetts Massachusetts 16 State wages, tips, etc. 58,000 62,100 17 State income tax withheld 2,950 3,100

The Byrds provide over half of the support of their two children, Cynthia (born January 25, 1989, Social Security number 123-45-6788) and John (born February 7, 1993, 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 $4,200 from a summer internship in 2013, and John earned $3,800 from a part-time job.

During 2013, the Byrds furnished 60% of the total support of Bruces widower father, Sam Byrd (born March 6, 1937, Social Security number 123-45-6787). Sam lived alone and covered the rest of his support with his Social Security benefits. Sam died in Novem- ber, and Bruce, the beneficiary of a policy on Sams life, received life insurance proceeds of $800,000 on December 28. The Byrds had the following expenses relating to their personal residence during 2013:

Property taxes $5,000 Qualified interest on home mortgage 8,800 Repairs to roof 5,750 Utilities 4,100 Fire and theft insurance 1,900 The following facts relate to medical expenses for 2013: Medical insurance premiums $4,500 Doctor bill for Sam incurred in 2012 and not paid until 2013 7,600 Operation for Sam 8,500 Prescription medicines for Sam 900 Hospital expenses for Sam 3,500 Reimbursement from insurance company, received in 2013 3,600

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

ward his fathers support.

Other relevant information follows:

When they filed their 2012 state return in 2013, the Byrds paid additional state

income tax of $900.

During 2012, 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.

In 2013, the Byrds received interest income of $2,750, which was reported on a Form

1099INT from Second National Bank.

Alices employer requires that all employees wear uniforms to work. During 2012,

Alice spent $450 on new uniforms and $225 on laundry charges.

Bruce paid $400 for an annual subscription to the Journal of Franchise Management.

Neither Alices nor Bruces 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.

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 2013. If they have overpaid, they want the amount to be refunded to them. If you use tax forms for your computations, you will need Forms 1040 and 2106 and Schedules A and B.