Jim and Anna Hilton (SS# xxx-xxx-xxx and yyy-yyy-yy) are married and have one child, Tina who is a dependent but does not qualify for the child tax credit. Jenny's SS# is bbb-bb-bbbb and she is currently in college. Jim works as a high school teacher (will take the educator expenses) and contributed to a qualified IRA and has no tax limitations on the deduction. Anna runs a craft business from their home. Annas employer portion of the self-employment tax on Annas income is $831 which is the deductible amount and no schedule SE needed for this return. Anna was divorced on June 30, 2020, and received $ 1,200 in alimony during 2021.

Note: Neither Jim nor Anna is blind or over age 65, and they plan to take the standard deduction and file their tax return with the IRS as married filing joint.

Jim and Anna income and expenses are:

Income: Jims salary 59,100 Annas business income 21,765 Interest from savings account 2,366 Interest from municipal bond funds 920

Gambling winnings 4,100

Annas alimony received 1,200

IRA distributions (50% taxable) 5,400

Expenditures: Federal income tax withheld from Jims wages 13,700 State income tax withheld from Jims wages 6,400 Social Security tax withheld from Jims wages 7,482 Anna self-employment tax (50% adjustment to income) 1,662 (No schedule SE required) Interest on student loans 2,300 Educator expenses 300

Penalty on early withdrawals of savings 720

IRA deduction 900

Charitable contributions (line 10b in Form 1040) 200

Based on the above information, determine Jim and Annas AGI and taxable income for the year and complete only page 1 of Form 1040 (through taxable income, line 15) and Schedule 1 for 2021.