Demarco and Janine Jackson have been married for 20 years and have four children who qualify as their dependents (Damarcus, Janine Jr., Michael, and Candice). The couple received salary income of $101,200 and qualified business income of $13,000 from an investment in a partnership, and they sold their home this year. They initially purchased the home three years ago for $215,000 and they sold it for $265,000. The gain on the sale qualified for the exclusion from the sale of a principal residence. The Jacksons incurred $17,100 of itemized deductions, and they had $3,350 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. The Jacksons are also allowed to claim a $2,400 recovery rebate credit for themselves and a $500 credit for each of their three youngest children. Assume they did not receive the rebate credit in advance. Assume CARES Act applies. (Use the tax rate schedules.)

The drop down options for 6 are : Greater of standard deductions or itemized deductions/ Lesser of standard deductions or itemized deductions.

Schedule Y-1-Married Filing Jointly or Qualifying Widow(er) If taxable income is over: But not over: The tax is: $ 0 $ 19,750 10% of taxable income $ 19,750 $ 80,250 $1.975 plus 12% of the excess over $19,750 $ 80,250 $171,050 59.235 plus 22% of the excess over $80,250 $171,050 $326,600 $29.211 plus 24% of the excess over $171,050 $326,600 $414,700 566,543 plus 32% of the excess over $326,600 $414,700 $622,050 $94.735 plus 35% of the excess over $414,700 $622,050 $167.307.50 plus 37% of the excess over $622.050 a. What is the Jacksons' taxable income, and what is their tax liability or (refund)? (Do not round intermediate calculations.) Amount Description (1) Gross income 2) For AGI deductions (3) Adjusted gross income 4 Standard deduction 5) Itemized deductions (8) 7) Deduction for qualified business income (8) Total deductions from AGI 9) Taxable income (10) Income tax liability (11) Other taxes (12) Total tax (13) Credits (14) Prepayments