Joe and Jessie are married and have one dependent child, Lizzie. Lizzie is currently in college at State University. Joe works as a design engineer for a manufacturing firm while Jessie runs a craft business from their home. Jessies craft business consists of making craft items for sale at craft shows that are held periodically at various locations. Jessie spends considerable time and effort on her craft business, and it has been consistently profitable over the years. Joe and Jessie own a home and pay interest on their home loan (balance of $220,000) and a personal loan to pay for Lizzies college expenses (balance of $35,000). Neither Joe nor Jessie is blind or over age 65, and they plan to file as married-joint. Assume that the employer portion of the self-employment tax on Jessies income is $854. Joe and Jessie have summarized the income and expenses they expect to report this year as follows:

Income: Joes salary $ 131,400

Jessies craft sales 18,630

Interest from certificate of deposit 1,880 Interest from Treasury bond funds 762

Interest from municipal bond funds 966

Expenditures:

Federal income tax withheld from Joes wages $ 13,700

State income tax withheld from Joes wages 6,860

Social Security tax withheld from Joes wages 7,574

Real estate taxes on residence 6,660

Automobile licenses (based on weight) 356

State sales tax paid 1,380

Home mortgage interest 18,300

Interest on Masterdebt credit card 2,760

Medical expenses (unreimbursed) 1,920

Joes employee expenses (unreimbursed) 2,860

Cost of Jessies craft supplies 6,790

Postage for mailing crafts 168

Travel and lodging for craft shows 2,460

Self-employment tax on Jessies craft income 1,708

College tuition paid for Lizzie 6,240

Interest on loans to pay Lizzies tuition 3,660

Lizzies room and board at college 13,080

Cash contributions to the Red Cross 640

Comprehensive Problem 6-63 Part-a (Algo) a. Determine Joe and Jessies AGI and taxable income for the year. (Round your intermediate calculations to the nearest whole dollar amount.)