Jack and Jill Brady live in Bridgewater, MA. Jack is 42 years old and a design engineer for a manufacturing company. Jill is 45 years old and runs a craft business from their home. Jill spends considerable time and effort on her craft business and it has been consistently profitable over the years. The Bradys have one child Julia (age 16). Julia is a high school student and works for a landscaping business during the summer she earned $5,500 in 2018.

The Bradys plan to file a joint tax return and provided the following information:

• Jacks social security number is 101-22-3434
• Jills social security number is 201-33-4545
• Julias social security number is 301-44-6060
• Mailing address is 23 Summer Street, Bridgewater, MA 02325

Jack Brady reported the following information relating to his employment during the year:

Employer	Gross Wages	Federal Income Tax Withholding	State Income Tax Withholding
ALT Manufacturing	$121,883	$13,200	$6,400

Jacks employer withheld all payroll taxes it was required to withhold. The entire Brady family was covered by minimum essential health insurance during each month in 2018. This insurance cost was $12,000 for 2018 and paid for by Jacks employer. Jack injured himself at work and was out of work for three weeks in March, 2018. Jack received workmans compensation payments of $5,000 during that period of time.

Jill Brady uses the cash method to account for her business activities which were as follows in 2018:

Craft sales $18,400

Advertising expense$1,650

Supplies expense$4,405

Postage expense $580

Jill made the following estimated tax payments in 2018: $3,000 for Federal income taxes and $1,000 for state income taxes. Jill also received a $20,000 gift in 2018 from her rich uncle who wanted to help her grow her business.

Jack and Jill also received the following investment income during the year:

Interest income from Certificate of Deposit$716

Interest income from U.S. Treasury Bond$1,650

Interest income from Municipal Bond$920

The Bradys did not own, control or manage any foreign bank accounts, nor were they grantors or beneficiaries of a foreign trust during the tax year.

The Bradys received a Massachusetts state income tax refund of $500 in May of 2018. The Bradys received the refund because they had overpaid their MA state individual income tax in 2017. On their 2017 Federal income tax return, the Bradys itemized their deductions and received full tax benefit (deduction) for the state tax income taxes paid in 2017.

Jack enjoys sports and wages bets on the local sports teams. Jack had gambling winnings of $500 during 2018 and gambling losses of $2,300.

Julia won an iPad valued at $600 by competing in her high schools 2018 technology contest. Julia also received a scholarship for $1,000 towards tuition if she decides to attend the State University and enroll in their technology program upon graduating high school.

The Bradys paid the following expenses during the year:

Mortgage interest on principal residence $13,700

Real property taxes on residence$6,200

Vehicle property tax based upon value$475

State sales tax$750

Unreimbursed medical expenses$2,400

Unreimbursed employee business expenses for Jack$1,500

Interest on credit cards$650

Contribution to American Red Cross$500

Contribution to Veterans of Foreign War$325