Comprehensive Problem 6-63 (LO 6-1, LO 6-2, LO 6-3) (Algo)

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[The following information applies to the questions displayed below.] Joe and Jessie are married and have one dependent child, Lizzie. Lizzie is currently in college at State University. Joe works as a design engineer for a manufacturing firm while Jessie runs a craft business from their home. Jessies craft business consists of making craft items for sale at craft shows that are held periodically at various locations. Jessie spends considerable time and effort on her craft business, and it has been consistently profitable over the years. Joe and Jessie own a home and pay interest on their home loan (balance of $220,000) and a personal loan to pay for Lizzies college expenses (balance of $35,000). Neither Joe nor Jessie is blind or over age 65, and they plan to file as married-joint. Assume that the employer portion of the self-employment tax on Jessies income is $843. Joe and Jessie have summarized the income and expenses they expect to report this year as follows:

Income:
Joes salary	$ 130,300
Jessies craft sales	18,520
Interest from certificate of deposit	1,770
Interest from Treasury bond funds	740
Interest from municipal bond funds	944
Expenditures:
Federal income tax withheld from Joes wages	$ 13,700
State income tax withheld from Joes wages	6,640
Social Security tax withheld from Joes wages	7,530
Real estate taxes on residence	6,440
Automobile licenses (based on weight)	334
State sales tax paid	1,270
Home mortgage interest	17,200
Interest on Masterdebt credit card	2,540
Medical expenses (unreimbursed)	1,810
Joes employee expenses (unreimbursed)	2,640
Cost of Jessies craft supplies	5,580
Postage for mailing crafts	157
Travel and lodging for craft shows	2,350
Self-employment tax on Jessies craft income	1,686
College tuition paid for Lizzie	6,020
Interest on loans to pay Lizzies tuition	3,440
Lizzies room and board at college	12,860
Cash contributions to the Red Cross	585

Comprehensive Problem 6-63 Part-a (Algo)

a. Determine Joe and Jessies AGI and taxable income for the year. (Round your intermediate calculations to the nearest whole dollar amount.)