Demarco and Janine Jackson have been married for 20 years and have four children who qualify as their dependents (Damarcus, Janine, Michael, and Candice). The couple received salary income of $181,000, qualified business income of $19,000 from an investment in a partnership, and they sold their home this year. They initially purchased the home three years ago for $245,000 and they sold it for $295,000. The gain on the sale qualified for the exclusion from the sale of a principal residence. The Jacksons incurred $18,300 of itemized deductions, and they had $4,450 withheld from their paychecks for federal taxes. They are also allowed to claim a child tax credit for each of their children. However, because Candice is 18 years of age, the Jacksons may claim a child tax credit for other qualifying dependents for Candice. (Use the tax rate schedules.) This is for the 2018 year.

a. What is the Jacksons taxable income, and what is their tax liability or (refund)? (Do not round intermediate calculation. Round "Income tax liability", "Total tax", "Taxes payable or Refund due" to 2 decimal places.)

b. Complete the first two pages of the Jacksons 1040 (use 2017 forms).

c. What would their taxable income be if their itemized deductions totaled $29,800 instead of $18,300?

d. What would their taxable income be if they had $0 itemized deductions and $9,600 of for AGI deductions?

2018 Tax Rate Schedules Schedule X-Single If tazable income is over: But not over: S 9.525 S 38,700 S 82,500 $157.500 $200,000 $500,000 The tax is: 9.525 38,700 82,500 $157,500 $200,000 $500,000 10% of taxable income $952.50 plus 12% of the excess over $9,525 $4453.50 plus 22% ofthe excess over $38,700 $14,089.50 plus 24% of the excess over $82.500 $32,099.50 plus 32% of the ercess over $157,500 $45,689.50 plus 35% of the excess over $200,000 $150,689.50 plus 37% of the excess over $500,000 Schedule Y-1-Married Filing Jointly or Qualifying Widow(er) If taxable income is over: But not over: The tax is: S 19,050 S 77,400 165,000 315,000 $400,000 $600,000 19.050 S 77,400 $165,000 $315,000 $400,000 $600,000 10% of taxable income $1,905 plus 12% of the excess over $19,050 sa-907 plus 22% ofthe excess o er S77.400 $28,179 plus 24% of the excess over $165,000 64,179 plus 32% of the excess over $315,000 $91,379 plus 35% of the excess over $400,000 $161,379 plus 37% of the excess over $600,000