Comprehensive Problem (Tax Return Problem). Rodney and Alice Jones have three small children, ranging in age from 5 to 10. One child is blind and needs special care. Rodney works as an accountant for a large CPA firm and has gross income of $45,000. Alice is a lawyer with a national law firm and earns $48,000. Rodneys parents are quite old, and he and his wife fully support them.

Rodneys employer provides group-term life insurance at twice the employees annual salary. Rodney is 40 years of age.

During 2018, Rodney and Alice receive the following dividends on their jointly held investments:

Dividends from Mexico Inc. (Mexican Corp.) $700

Dividends from Widget Steel Corp. $150

They received interest income from the following investments: Interest on State of Ohio highway bonds $800

Interest on deposits in savings and loans $400

The Joneses have itemized deductions of $25,000. Compute their taxable income. * NOTE: THIS IS FOR 2018*