Bruce and Amanda are married during the tax year. Bruce is a botanist at Green Corporation. Bruce earns a salary of $56,000 per year. Green Corporation has an accountable reimbursement plan. During the year, Bruce has $5,000 of employee expenses. Green Corporation reimburses Bruce for only $4,000 of expenses. Bruce decides to put $5,500 into a Traditional IRA. Amanda owns a financial consulting firm as a sole proprietor (it qualifies as a full trade or business). Amanda generates $80,000 of revenues during the year. She has the following business payments associated with her firm: Utilities: $2,000 Office Rent: $14,000 Self-Employment Tax: $5,000 Salary for her secretary: $20,000 Fines/Penalties: $8,000 Payroll Taxes (Employer Portion): $1,000 Business Meals: $2,000 Bribe to police officer to forgive parking violation $1,500 Due to the income and expenses above, Amanda has $39,500 of Qualified Business Income. Also, during the year a tornado damaged the roof of their personal residence. They purchased the home five years ago for $250,000. The value of the home after the tornado was $200,000. Bruce and Amanda do not know the fair market value of the home immediately before the tornado, but the repair cost was $20,000. The home is located in a federally declared disaster area. They also have the following personal expenses during the year: Medical Expenses: $18,750 State & Local Taxes $4,000 Federal Income Tax Payments: $6,000 The personal exemption amount for the tax year is: $0 The standard deduction amounts are listed below: Single: $12,200 Head of Household: $18,350 Married Filing Jointly: $24,400 Calculate the appropriate amounts below for Bruce and Amanda on the following page. Please show your work for maximum points. 8

Show your work below. Note that it helps to identify items (i.e. medical expense, state tax payment etc.): Gross Income: Bruce and Amandas Gross Income is: ________________ Adjusted Gross Income: Bruce and Amandas Adjusted Gross Income is: __________________ Taxable Income: Bruce and Amandas Taxable Income is: __________________