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 $851. Joe and Jessie have summarized the income and expenses they expect to report this year as follows: Income: Joes salary $ 131,100 Jessies craft sales 18,600 Interest from certificate of deposit 1,850 Interest from Treasury bond funds 756 Interest from municipal bond funds 960 Expenditures: Federal income tax withheld from Joes wages $ 13,700 State income tax withheld from Joes wages 6,800 Social Security tax withheld from Joes wages 7,562 Real estate taxes on residence 6,600 Automobile licenses (based on weight) 350 State sales tax paid 1,350 Home mortgage interest 18,000 Interest on Masterdebt credit card 2,700 Medical expenses (unreimbursed) 1,890 Joes employee expenses (unreimbursed) 2,800 Cost of Jessies craft supplies 6,460 Postage for mailing crafts 165 Travel and lodging for craft shows 2,430 Self-employment tax on Jessies craft income 1,702 College tuition paid for Lizzie 6,180 Interest on loans to pay Lizzies tuition 3,600 Lizzies room and board at college 13,020 Cash contributions to the Red Cross 625

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

b. Complete page 1 of Form 1040 (through taxable income, line 15), Schedule 1, and Schedule A. (Round your intermediate computations to the nearest whole dollar amount. Input all the values as positive numbers. Enter any non-financial information, (e.g. Names, Addresses, social security numbers) EXACTLY as they appear in any given information or Problem Statement. Use 2021 tax rules regardless of year on form.) Joes address is 19010 N.W. 135th Street, Miami, FL 33054. Social security numbers: Joe: 111-11-1111 Jessie: 123-45-6789 Lizzie: 567-89-0123