James and Esther Johnson live at 45678 S.W. 112th Street, Homestead, FL 33033. James, who is 67 years old (date of birth 12/14/1951), is retired receiving social security benefits and Esther, who is 66 years old (date of birth 06/11/1952), is also retired but working on a part-time basis. Their social security numbers are 412-34-5670 and 412-34-5671, respectively. The Johnsons had qualifying health care coverage at all times during the tax year. Annual social security income for Jim is $22,000 (SSA-1099, box 5) and for Esther is $10,800 (SSA-1099, box 5). Interest received by them from Central Bank is $2,545 (1099-INT, box 1). No income tax withholding was made. Esther is working part-time as an interior decorator as an employee of Decorating House, a corporation. Her form W-2 shows the following information:

Wages	=	$	15,000.00
Federal W/H	=	$	1,500.00
Social security wages	=	$	15,000.00
Social security W/H	=	$	930.00
Medicare wages	=	$	15,000.00
Medicare W/H	=	$	217.50

Their itemized deductions are as follows:

1. Mortgage interest on their main home, $10,500.
2. Real estate taxes, $5,600.
3. Personal property taxes, $185.
4. Doctors' expenses unreimbursed by insurance, $7,400.
5. Medical insurance premiums for the year, $2,400.
6. Prescribed medicine, $1,995.
7. Vitamins, $300.
8. Total cash contributions to their church, $675. The contributions were made over the course of the year and no individual contribution was greater than $250.
9. Tax preparation fees for their 2017 return, $325, paid in 2018.
10. Lottery tickets bought by Esther during the year, $750. Winnings received, $940 (W-2G, box 1). Income tax withholding on winnings, $35 (W-2G, box 4).

Because the Johnsons live in Florida, where there is no state income tax, they will deduct the estimation of the general sales tax related to the area in which they live. The most efficient way to do this is by using the Sales Tax Calculator on the IRS website at https://www.irs.gov/Individuals/Sales-Tax-Deduction-Calculator. A key point to remember in using the calculator is that income for this calculation also includes the nontaxable portion of social security benefits. Prepare their individual income tax return using the appropriate forms. They do not want to contribute to the presidential election campaign and do not want anyone to be a third-party designee. For any missing information, make reasonable assumptions. They had qualifying health coverage at all times during the year. (List the names of the taxpayers and any income they receive in the order in which they appear in the problem. Input all the values as positive numbers unless otherwise stated in the forms. Instructions can be found on certain cells within the forms. Round your final answers to the nearest whole dollar amount.)

Use the appropriate Tax Tables.

Page 2 of Form 1040. Some information does not carry over from Page 1.

Form 1040 (2018)							Page 2
	1 Wages, salaries, tips, etc. Attach Form W-2					1
	2a Tax-exempt interest		2a		b Taxable interest	2b
	3a Qualified dividends		3a		b Ordinary dividends	3b
	4a IRAs, pensions, and annuities		4a		b Taxable amount	4b
Standard deduction for-	5a Social security benefits		5a		b Taxable amount	5b
	6 Total income. Add lines 1 through 5. Add any amount from Schedule 1, line 22					6
	7 Adjusted gross income. If you have no adjustments to income, enter the amount from line 6; otherwise, subtract Schedule 1,
Single or Married filing separately, $12,000	line 36, from line 6					7
	8 Enter the standard deduction; otherwise, attach Schedule A					8
	9 Qualified business income deduction (see instructions)					9
Married filing jointly or Qualifying widow(er), $24,000	10 Taxable income. Subtract lines 8 and 9 from line 7. If zero or less, enter -0-					10
	11 a Tax (see inst)		(check if any form:	1. Form(s) 8814checkbox unchecked1 of 3	2. Form 4972checkbox unchecked2 of 3
	3.checkbox unchecked3 of 3		)
	b Add any amount from Schedule 2 and check here			checkbox unchecked1 of 1		11
Head of household, $18,000	12 a Child tax credit/credit for other dependents
	b Add any amount from Schedule 3 and check here			checkbox unchecked1 of 1		12
	13 Subtract line 12 from line 11. If zero or less, enter -0-					13
	14 Other taxes. Attach Schedule 4					14
If you checked any box under Standard deduction, see instructions.	15 Total tax. Add lines 13 and 14					15
	16 Federal income tax withheld from Forms W-2 and 1099					16
	17 Refundable credits:	a EIC (see inst.)		b Sch 8812
	c Form 8863		d Add any amount from Schedule 5
	18 Add lines 16 and 17 a through d. These are your total payments.					18
Refund	19 If line 18 is more than line 15, subtract line 15 from line 18. This is the amount you overpaid					19
	20a Amount of line 19 you want refunded to you. If Form 8888 is attached, check here				checkbox unchecked1 of 1	20a
Direct deposit? See instructions.	b Routing number		c Type:	Checkingcheckbox unchecked1 of 1	Savingscheckbox unchecked1 of 1
	d Account number
	21 Amount of line 19 you want applied to your 2019 estimated tax			21
Amount You Owe	22 Amount you owe. Subtract line 18 from line 15. For details on how to pay, see instructions					22
	23 Estimated tax penalty (see instructions)			23