Bob (age 43) and Melissa (age 43) Grant are married and live in Lexington, Kentucky. The Grants have two children: Jared, age 15, and Alese, age 12. The Grants would like to file a joint tax return for the year.

The following information relates to the Grants tax year:

Bobs Social Security number is 987-45-1235

Melissas Social Security number is 494-37-4893

Jareds Social Security number is 412-32-5690

Aleses Social Security number is 412-32-6940

The Grants mailing address is 95 Hickory Road, Lexington, Kentucky 40502. Jared and Alese are tax dependents for federal tax purposes

Bob Grants Forms W-2 provided the following wages and withholding for the year:

Employer	Gross Wages	Federal Income Tax Withholding	State Income Tax Withholding
National Storage	$66,200	$8,000	$3,750
Lexington Little League	$14,710	0	0

Melissa Grants Form W-2 provided the following wages and withholding for the year:

Employer	Gross Wages	Federal Income Tax Withholding	State Income Tax Withholding
Jensen Photography	$44,500	$5,450	$2,225

All applicable and appropriate payroll taxes were withheld by the Grants respective employers. All the Grant family was covered by minimum essential health insurance during each month in 2023. The insurance was provided by Bobs primary employer, National Storage.

The Grants also received the following during the year:

Interest income from First Kentucky Bank $130

Interest income from City of Lexington, KY Bond $450

Interest income from U.S. Treasury Bond $675

Interest income from Nevada State School Board Bond $150

Qualified dividend from Huggies Company $4,000 Workers compensation payments to Bob $4,350 Disability payments received by Bob due to injury $3,500

National Storage paid 100% of the premiums on the policy and included the premium payments in Bobs taxable wages

Melissa received the following payments due to a lawsuit she filed for damages sustained in a car accident:

Medical Expenses for physical injuries $2,500

Emotional Distress (from having been physically injured) $12,000

Punitive Damages $10,000

Total $24,500

On January 1, 2022 (the prior year), Melissa started a photography business in which she takes bridal and wedding photographs. She does not do any of the professional printing. However, she provides all the digital files to her clients on a password-protected web site as part of her service. This unique service, along with her skill and reputation, has allowed her to earn additional money on the weekends, primarily in the summer, Melissa rents all the camera equipment and does not currently own any equipment herself. The photography business uses the cash method of accounting. The business did not have any obligation to file a Form 1099 to any payee during the year. Melissa reported the following revenue and expenses for her business this year:

Gross Revenue $10,000

Photographic supplies $ 850

Camera rental $ 2,550

Web site hosting fee $ 400

.

The Grants did not own, control or manage any foreign bank accounts nor were they grantors or beneficiaries of a foreign trust during the tax year. Also, the Grants did not buy, sell, exchange, or otherwise dispose of any financial interest in any virtual currency.

The Grants paid or incurred the following expenses during the year:

Dentist/Orthodontist (unreimbursed by insurance) $ 10,500

Doctor fees (unreimbursed by insurance) $ 2,625

Prescriptions (unreimbursed by insurance) $ 2,130

KY state tax payment made on 4/15/2023 for 2022 tax return liability $ 1,350

Real property taxes on residence $ 3,800

Vehicle registration taxes based on age of vehicle $ 1,250

Mortgage interest on principal residence $ 18,560

Interest paid on borrowed money to purchase the City ofn Lexington, KY municipal bonds $ 400

Interest paid on borrowed money to purchase U.S. Treasury bonds $ 240

Contribution to the Red Cross $ 1,000

Contribution to Senator Rick Hartleys Re-election Campaign $ 2,500

Contribution to First Baptist Church of Kentucky $ 6,000

Fee paid to Jones & Company, CPAs for tax preparation $ 200

.

The Grants both want to contribute to the Presidential Election Campaign Fund. The Grants would like to receive a refund (if any) of any tax they may have overpaid for the year. Their preferred method of receiving the refund is by check.

Required: explain how to do each

Compute the Income Tax 2023 Formula for Bob and Melissa Grant

Use the following information to complete Bob and Melissa Grant 2023 federal income tax return.

FORM 1040

Schedule 1

Schedule 2

Schedule A

Schedule C

Schedule SE