Jason and Mary Garrett have changed careers after winning the super bowl. They have come to you for assistance in completing their tax return and answering their questions. Their finances have substantially changed since the football days. Below you are provided with the Garretts data. Using the tax tables below, please answer the Garretts questions.

INCOME/ CASH INFLOWS Jasons salary at Pickens Inc, $105,000

Marys salary at Commerce, ISD $35,000 Life Insurance Proceeds from Death of Melanies brother $50,000

Gambling winnings of $6,000 from Jasons Las Vegas trip

RETIREMENT CONTRIBUTIONS

Jasons Roth IRA Contribution $3,000

Marys Contribution to 401(k) $8,000

OTHER FINANCIAL DATA

Interest earned on savings account owned by Mr. and Mrs. Garrett $500

Property taxes paid $6,000 Interest paid on mortgage $15,000 Medical expenses paid when Jason had back surgery $30,000

Income tax withholding for the year $22,500 (both individuals) Student Loan interest paid on Marys student loan $3,000

Troy Garrett is 14 and the Garretts son Charitable contributions (cash) of $10,000 made payable to Texas A&M University Commerce

Please answer the following questions you must show all work and not just write the number.

1. What is the income used to calculate the AGI?

What are the above the line deductions?

What is the Garetts AGI?

Should the Garretts take the standard deduction or file a Schedule A? Please list the dollar amount that is eligible for the option that you select

What is the taxable income for the Garetts?

What is the Garetts marginal tax rate and their average tax rate.

Will the Garetts have a refund or owe additional money?