Following is a list of information for Peter and Amy Jones for the current tax year. Peter

and Amy are married and have three children, Aubrynne, Bryson, and Caden. They live at

100 Main Street, Anytown, USA 00000. Peter is a lawyer working for a Native American

law firm. Amy works part-time in a genetic research lab. The Jones Social Security numbers

and ages are as follows:

Name S.S. No. Age

Peter 111-11-1111 32

Amy 222-22-2222 28

Aubrynne 333-33-3333 5

Bryson 444-44-4444 3

Caden 555-55-5555 1

Receipts

Peters salary $70,000

Amys salary 32,000

Interest income on municipal bonds 2,400

Interest income on certificate of deposit (Universal Savings) 3,100

Dividends on GM stock 1,600

Disbursements

Eyeglasses and exams for Aubrynne $ 600

Orthodontic work for Bryson to correct a congenital defect 2,500

Medical insurance premiums, after-tax basis 1,800

Withholding for state income taxes 7,200

Withholding for federal income taxes 16,000

State income taxes paid with last years tax return (paid when the return was filed in the current year) 500

Property taxes on home 1,100

Property taxes on automobile 300

Interest on home 9,700

Interest on credit cards 200

Cash contribution to church 3,900

In addition to the above, on September 17, Peter and Amy donate some Beta Trader, Inc. stock to Lakeville Community College. Beta Trader, Inc. is publicly traded. The FMV of the stock on the date of the contribution is $700. Peter and Amy had purchased the stock on November 7, 2003 for $300.

Compute Peter and Amys income tax liability for the current year using Form 1040, Schedules A and B, and Form 8283, If necessary. self-employment tax, but not AMT. Strive for the lowest tax liability for the taxpayers (tax avoidance not tax evasion). Include any assumptions which you feel will assist in the audit process.