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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

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 $845. Joe and Jessie have summarized the income and expenses they expect to report this year as follows:

Income:
Joes salary $ 130,500
Jessies craft sales 18,540
Interest from certificate of deposit 1,790
Interest from Treasury bond funds 744
Interest from municipal bond funds 948
Expenditures:
Federal income tax withheld from Joes wages $ 13,700
State income tax withheld from Joes wages 6,680
Social Security tax withheld from Joes wages 7,538
Real estate taxes on residence 6,480
Automobile licenses (based on weight) 338
State sales tax paid 1,290
Home mortgage interest 17,400
Interest on Masterdebt credit card 2,580
Medical expenses (unreimbursed) 1,830
Joes employee expenses (unreimbursed) 2,680
Cost of Jessies craft supplies 5,800
Postage for mailing crafts 159
Travel and lodging for craft shows 2,370
Self-employment tax on Jessies craft income 1,690
College tuition paid for Lizzie 6,060
Interest on loans to pay Lizzies tuition 3,480
Lizzies room and board at college 12,900
Cash contributions to the Red Cross 595

a. Determine Joe and Jessies AGI and taxable income for the year. (Round your intermediate calculations to the nearest whole dollar amount.)

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