Joe and Jessle 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. Jessie's 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 Lizzie's 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 Jessie's income is $844. Joe and Jessie have summarized the income and expenses they expect to report this year as follows: 5 130,400 15.530 1.700 742 966 Income: Joe's salary Jessie's craft sales Interest from certificate of deposit Interest from Treasury bond funds Interest fron municipal bond funds Expenditures Federal income tax withheld from Joe's wages State income tax withheld from Joe'swagen Social Security tax withheld from Joel wages Real estate takes on residence Automobile licenses (based on weight) State salon tax paid Hoe mortgage Interest Interest on Waterdebt credit card Medical expense (unreinburned) Joola employees burned) cost of Jessie's craft supplies tot in craft Travel and Lodging for oratio College totion paid for Line Bolt-employent tamen Jerslere craft Income Interest on loans to pay tuition Lise room and board at college Caso contributions to the Red Cross $ 13,700 5,660 7,534 6.460 336 1.200 17,300 2.560 1.920 2.66 3,690 20 253 2.360 1.633 5,000 3.460 12.30 Sad Postage se - * 4 S O 8 7 E T W R Y O C 1 P D F S G H J K V C . N v M s6 36 Command option command Federal income tax withheld from Joe's wagen State income tax withheld from Joe's wages Social Security tax withheld from Joo's wages Real estate taxes on residence Automobile licenses (based on weight) state sales tax paid Home mortgage interest Interest on Masterdebt credit card Medical expenses (unreimbursed) Joel enployee expenses (unreimbursed) Cost of Jessie's craft supplies Postage for mailing crafts Travel and lodging for craft shown Self-employment tax on Jessie's craft income College tuition paid for Lizzie Interest on loans to pay Lizzie's tuition Lizzie's room and board at college Cash contributions to the Red Cross $ 13,700 6.660 7.534 6.460 336 1,280 17,300 2.560 1.820 2,660 5,690 158 2,360 1.68 6,040 3,460 12.880 590 a. Determine Joe and Jessie's AG and taxable income for the year. (Round your intermediate calculations to the nearest whole dollar amount.) Joe and Jessie's AGI Joe and Josie's Taxable income + & "X 5 UN o B 3 4 R. T Y U C E o o G F S 0 H J L V c V X N B M 22 26 Command OpAV Courmand
