During all of 2018, Mr. and Mrs. Clay lived with their four children (all are under the age of 17). They provided over one-half of the support for each child. Mr. and Mrs. Clay file jointly for 2018. Neither is blind, and both are under age 65. They reported the following tax-related information for the year: (Use the tax rate schedules) Salary income $125,000 Prize from local radio station 1,500 Medical expenses (no health insurance) 4,000 Real estate taxes 4,200 Alimony paid by Mr. Clay (divorced in 2015) 12,000 State income taxes withheld in 2018 1,800 State income taxes paid with 2018 tax return (return was filed in April, 2019) 1,500 Federal income tax withholding 7,500 Qualified home mortgage interest (acquisition debt of $300,000) 15,000 Charitable contributions 4,000 A. What is the Clays' taxes payable or (refund due) (ignore the alternative minimum tax)? B. What is the Clays' tentative minimum tax and alternative minimum tax? Learning Objective: 08-05 Explain how to compute a taxpayer's underpayment, late filing, and late payment penalties.

4) During all of 2018, Mr. and Mrs. Clay lived with their four children (all are under the age of 17). They provided over one-half of the support for each child. Mr. and Mrs. Clay file jointly for 2018. Neither is blind, and both are under age 65. They reported the following tax-related information for the year: (Use the tax rate schedules) Salary income Prize from local radio station Medical expenses (no health insurance) Real estate taxes Alimony paid by Mr. Clay (divorced in 2015) State income taxes withheld in 2018 State income taxes paid with 2018 tax return (return was filed in April, 2019) Federal income tax withholdin $125,000 1,500 4,000 4,200 12,000 1,800 1,500 7,500 15,000 4,000 ualified home mortgage interest (acquisition debt of $300,000 Charitable contributions A. What is the Clays' taxes payable or (refund due) (ignore the alternative minimum tax)? B. What is the Clays' tentative minimum tax and alternative minimum tax? Learning Objective: 08-05 Explain how to compute a taxpayer's underpayment, late filing, and late payment penalties A. Clays' taxes payable or (refund due) Salary Income - $125,000