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 $831. Joe and Jessie have summarized the income and expenses they expect to report this year as follows:

Income: Joes salary $ 129,100 Jessies craft sales 18,400 Interest from certificate of deposit 1,650 Interest from Treasury bond funds 716 Interest from municipal bond funds 920 Expenditures: Federal income tax withheld from Joes wages $ 13,700 State income tax withheld from Joes wages 6,400 Social Security tax withheld from Joes wages 7,482 Real estate taxes on residence 6,200 Automobile licenses (based on weight) 310 State sales tax paid 1,150 Home mortgage interest 14,000 Interest on Master debt credit card 2,300 Medical expenses (unreimbursed) 1,690 Joes employee expenses (unreimbursed) 2,400 Cost of Jessies craft supplies 4,260 Postage for mailing crafts 145 Travel and lodging for craft shows 2,230 Self-employment tax on Jessies craft income 1,662 College tuition paid for Lizzie 5,780 Interest on loans to pay Lizzies tuition 3,200 Lizzies room and board at college 12,620 Cash contributions to Red Cross 525

Complete the attached Excel tax formula worksheet

Filing Status

Description

Gross Income: (List income items below) (4)

Total Income

Adjustments for AGI: (List deductions below) (2)

Charitable Contribution (only if SD) (1)

Adjusted Gross Income (AGI)

Deductions from AGI: (List items below) 1)

Itemized Deductions (show your work)

or

Standard Deduction (1)

Qualified Business Deduction

Taxable Income

Taxes Due or Refund