determine Mike and Molly's overall federal income tax owed/refund for the current year

Mike and Molly are happily married and want to file a joint return. Mike works for Brown Corporation and Molly works for Red Inc. Their W-2s are included below. They have two children, who live at home with them. Kelly is 6 years old and Celeste is 17 years old. Mindy is a high school student, but she has a part-time job where she earned $4,900. The entire family has health insurance through Molly's employer. Premiums were $20,000, $8,000 of which was covered by Red Inc.(as indicated by code DD on his W-2). The family also had to pay $2,000 for various copays (not paid for by insurance) for doctor visits, medical tests, and prescription medicine. They had the following sales during the year: Sale of AMD stock for $2,200, purchased 2 years ago for $1,200. Sale of Cub Inc. stock for $9,000, purchased 3 months ago for $4,000. Sale of J Corp. stock for $1,600, purchased 3 years ago for $12,600. 20 days before selling the stock they received a dividend of $1,000 from J Corp. They made an $800 donation to their favorite public charity during the year. They incurred the following expenses related to their primary residence: Property taxes 7,500 Mortgage interest 9,000 Homeowners insurance 1,200 Cost of replacing roof 6,000 Utilities 2,400 They also own a townhouse that they rent out (as a residential property): Rental income 40,000 Mortgage interest 11,000 Property taxes 7,000 Utilities 1,800 Repairs and maintenance 5,000 Insurance 3,000 They purchased the rental townhouse in March 2016 for $300,000. Assume their rental activity does not qualify for the QBI deduction.

b Employer identification number (EIN) c Employer's name, address, and ZIP code 1 Wages, tipsother compensation 70,000 3 Social security wages 70,000 5 Medicare wages and tips 70,000 Social security tips 2 Federal income tax withheld 7,000 4 Social Security tax withheld 4,340 6 Medicare tax withheld 1,015 8 Allocated tips d Control number 10 Dependent care benefits Employee's first name and initial Last name Suft. 11 Nonqualified plans 12a Theory 12b 14 Other 12c Mike 12d f Employee's address and ZIP code 15 State Employer's state ID number IL 18 Local wages, tips, etc. 10 Local income tax 20 Locality name 16 State wages, tips, etc. 17 State income tax .70,000 2,800 Employer identification number (EIN Employer's name, address, and ZIP code 1 Wages, tips, other compensation 40,000 Social security wages 40,000 5 Medicare wages and tips 40,000 Social security tips 2 Federal income tax withheld 4,000 4 Social security tax withheld 2,480 6 Medicare tax withheld 580 8 Alocated tips d Control number 10 Dependent care benefits e Employee's first name and initial Last name Suft. 11 Nonqualified plans 12a DDL 8,000 13 12b Molly 14 Other 120 12d f Employee's address and ZIP code State Employer's state ID number IL 18 Local wages, tips, etc. 10 Local income tax 20 Localy name 16 State wages, tips, etc. 17 State income tax 40,000 1,600 b Employer identification number (EIN) c Employer's name, address, and ZIP code 1 Wages, tipsother compensation 70,000 3 Social security wages 70,000 5 Medicare wages and tips 70,000 Social security tips 2 Federal income tax withheld 7,000 4 Social Security tax withheld 4,340 6 Medicare tax withheld 1,015 8 Allocated tips d Control number 10 Dependent care benefits Employee's first name and initial Last name Suft. 11 Nonqualified plans 12a Theory 12b 14 Other 12c Mike 12d f Employee's address and ZIP code 15 State Employer's state ID number IL 18 Local wages, tips, etc. 10 Local income tax 20 Locality name 16 State wages, tips, etc. 17 State income tax .70,000 2,800 Employer identification number (EIN Employer's name, address, and ZIP code 1 Wages, tips, other compensation 40,000 Social security wages 40,000 5 Medicare wages and tips 40,000 Social security tips 2 Federal income tax withheld 4,000 4 Social security tax withheld 2,480 6 Medicare tax withheld 580 8 Alocated tips d Control number 10 Dependent care benefits e Employee's first name and initial Last name Suft. 11 Nonqualified plans 12a DDL 8,000 13 12b Molly 14 Other 120 12d f Employee's address and ZIP code State Employer's state ID number IL 18 Local wages, tips, etc. 10 Local income tax 20 Localy name 16 State wages, tips, etc. 17 State income tax 40,000 1,600