Bart and Elizabeth Forrest are married and have no dependents. They have asked you to advise them whether they should file jointly or separately in 2020. Bart incurred some significant medical expenses during the year related to an unexpected surgery. They present you with the following information:

	Bart		Elizabeth		Joint
Salary (Bart)	$38,000
Salary (Elizabeth)			$110,000
Interest income	400		1,200		$2,200
Deductions for AGI	2,400		14,000
Medical expenses	10,427		3,358
State income tax	900		11,800
Real estate tax					5,800
Mortgage interest					4,200
Unreimbursed employee expenses	1,200

If they file separately, Bart and Elizabeth will split the real estate tax and mortgage interest deductions equally.

If an amount is zero, enter "0". Do not round your intermediate tax computations but round your final tax answers to the nearest dollar. Round all other computations to the nearest dollar.

Complete the comparison table through AGI, then compute the total amount of the itemized deductions on the separate schedule before completing the remainder of the table.

Click here to access the 2020 tax rate schedule.

Bart and Elizabeth Forrest Comparison of Joint and Separate Tax Liabilities Tax Year 2020

	Bart		Elizabeth		Joint
Salary (Bart)	$fill in the blank 8c7a31f6201304c_1				$fill in the blank 8c7a31f6201304c_2
Salary (Elizabeth)			fill in the blank 8c7a31f6201304c_3		fill in the blank 8c7a31f6201304c_4
Interest income	fill in the blank 8c7a31f6201304c_5		fill in the blank 8c7a31f6201304c_6		fill in the blank 8c7a31f6201304c_7
Gross income	$fill in the blank 8c7a31f6201304c_8		$fill in the blank 8c7a31f6201304c_9		$fill in the blank 8c7a31f6201304c_10
Less: deductions for AGI	fill in the blank 8c7a31f6201304c_11		fill in the blank 8c7a31f6201304c_12		fill in the blank 8c7a31f6201304c_13
AGI	$fill in the blank 8c7a31f6201304c_14		$fill in the blank 8c7a31f6201304c_15		$fill in the blank 8c7a31f6201304c_16
Medical expenses after 7.5%-of-AGI floor	$fill in the blank 8c7a31f6201304c_17		$fill in the blank 8c7a31f6201304c_18		$fill in the blank 8c7a31f6201304c_19
State income and real estate taxes	fill in the blank 8c7a31f6201304c_20		fill in the blank 8c7a31f6201304c_21		fill in the blank 8c7a31f6201304c_22
Mortgage interest	fill in the blank 8c7a31f6201304c_23		fill in the blank 8c7a31f6201304c_24		fill in the blank 8c7a31f6201304c_25
Total itemized deductions (MFS) or standard deduction (MFJ)	$fill in the blank 8c7a31f6201304c_26		$fill in the blank 8c7a31f6201304c_27		$fill in the blank 8c7a31f6201304c_28
Total deductions from AGI	$fill in the blank 8c7a31f6201304c_29		$fill in the blank 8c7a31f6201304c_30		$fill in the blank 8c7a31f6201304c_31
Taxable income	$fill in the blank 8c7a31f6201304c_32		$fill in the blank 8c7a31f6201304c_33		$fill in the blank 8c7a31f6201304c_34
Tax	$fill in the blank 8c7a31f6201304c_35		$fill in the blank 8c7a31f6201304c_36		$fill in the blank 8c7a31f6201304c_37
Savings from filing jointly:
Tax filing separately					$fill in the blank 8c7a31f6201304c_38
Tax filing jointly					fill in the blank 8c7a31f6201304c_39
Savings					$fill in the blank 8c7a31f6201304c_40

Complete the letter to Bart and Elizabeth.

Maloney, Young, Nellen, & Persellin, CPA 5191 Natorp Boulevard Mason, OH 45040

January 23, 2021

Mr. and Mrs. Bart Forrest 2003 Highland Drive Durham, NC 27707

Dear Mr. and Mrs. Forrest:

I have reviewed the tax information you provided and have determined that your Federal income taxes minimized by filing for 2020. A detailed computation that supports my conclusion is enclosed.

Please let me know if you have any question or would like to discuss my recommendation in further detail. Thank you for consulting our firm on this matter. We look forward to serving you in the future.

Sincerely,

Richard Rodriguez, CPA Partner