In need of assistance for itemized deductions and Qualified Business Expense. Joe and Jessie are married and have one dependent child, Lizzie. Lizzie is currently in college at State

University. Joe works as a design engineer for a manufacturing firm, while Jessie runs a craft business

from their home. Jessie's craft business consists of making craft items for sale at craft shows that are held

periodically at various locations. Jessie spends considerable time and effort on her craft business, and it

has been consistently profitable over the years. Joe and Jessie own a home and pay interest on their

home loan $($balance of $$220,000)$ and a personal loan to pay for Lizzie's college expenses $($balance of

$$35,000.$

Neither Joe nor Jessie is blind or over age $65,$ and they plan to file as married joint. Assume that the

employer portion of the self$-$employment tax on Jessie's income is $$831.$ Joe and Jessie have

summarized the income and expenses they expect to report this year as follows:

Income: