Calculate the taxpayers' income tax balance due (or refund) according to the attached set of facts. Please show and label all calculations.

INCOME:

THOMAS SALARY 75,000

VANESSA SALARY 30,000

INTEREST INCOME FROM SANTANDER BANK 1,400

INTEREST INCOME FROM MUNICIPAL BONDS 3,500

QUALIFIED DIVIDEND INCOME 2,600

UNEMPLOYMENT COMPENSATION 12,000

VANESSA RECEIVED A GIFT FROM HER UNCLE FOR HER 40TH BIRTHDAY 10,000

THOMAS SOLD A PARCEL OF LAND HE PURCHASED 11 YEARS AGO THAT COST 21,000 17,000

THOMAS RECEIVED REIMBURSEMENT FOR BUSINESS EXPENSES UNDER AN ACCOUNTABLE PLAN 2,000

EXPENSES:

VANESSA CONTRIBUTED TO A TRADITIONAL IRA. SHE IS NOT COVERED BY A PENSION PLAN AT WORK. 5,000

FEDERAL INCOME TAXES WITHHELD FROM THEIR SALARIES 9,500

MEDICAL EXPENSES PAID 11,475

STATE INCOME TAXES PAID 3,500

MISCELLANEOUS ITEMIZED DEDUCTIONS 1,300

PROPERTY TAXES PAID 7,200

INTEREST PAID ON 350,000 MORTGAGE 14,500

CASH CHARITABLE DONATIONS 1,200

POLITICAL CONTRIBUTIONS 1,500