Jane and Mike are married with two children, Carla and Danny. Jane earns $$65,000$ per year

from her job as a consultant. Mike is an engineer making $$55,000$ per year. They have no

exclusion available for this income and have no deductions for adjusted gross income.

Jane & Mike$$s daughter Carla is $14,$ lives at home, and earns $$12,000$ per year from her job

as a waiter at an exclusive restaurant. Danny, $25$ attends Big State University full$-$time. He

earns $$7,000$ per year at a part$-$time job as a cashier and lives at home with his parents. Jane

and Mike provide over half the support of both Carla and Danny.

Jane & Mike have $$13,000$ in medical expenses $($amount does not include health insurance

listed above$).$ They also have $$6,000$ in State & Local Taxes and $$7,000$ in property taxes.

In addition, Jane and Mike made $$20,000$ in taxable contributions for the tax year.

Calculate the following amounts below for Jane & Mike$$s tax return:

Gross Income: $\_\_\_\_\_\_\_\_\_\_\_\_\_$

Adjusted Gross Income$\_\_\_\_\_\_\_\_\_\_\_\_\_$

Taxable Income $\_\_\_\_\_\_\_\_\_\_$

$5.$ For problem number $4$ above, what is Jane and Mike$$s tax liability for the tax year?

a$.$ What is the amount of their available child tax credits in addition to any credit

amounts for those dependents that do not qualify for the child tax credit?

b$.$ What would have been the total amount of their dependency exemptions if these

had still been allowed? Do you believe that the child tax credit or the dependency

exemption amounts are more favorable for taxpayers?