Joe earns $39,000 per year, and he's paid monthly. His monthly 401k contribution is $292.50. Lauren earns $52,800 per year, and she's paid monthly. Her monthly 401k contribution is $396.

(1 point) Joe and Lauren are married, and they are filing their 2020 federal income taxes jointly. Suppose $75 is deducted from each of Joe's monthly paychecks for health insurance, and $150 is deducted from each of Lauren's monthly paychecks for health insurance. Remember that Joe and Lauren make contributions to their 401(k) plans with each of their monthly paychecks based on the numbers above. When finding their annual taxable income, how much are the benefits?

(1 point) When finding their annual taxable income, how much are the deductions? Note: Your answer should be the amount that they will claim for their deductions when they file their taxes.

Here is the relevant information:

For 2020, the standard deduction for a married couple filing jointly is $24,800.

Joe and Lauren paid $2,818.26 in state taxes and $2,065.50 in local taxes for 2020.

Recall that Joe and Lauren bought a house in Part 3 of the project, and the mortgage interest and property taxes are itemized deductions. For simplicity, assume that their first mortgage payment occurred on January 1, 2020. ($279,000. They will make a 20% down payment, and they expect to be approved for a 30-year mortgage with an interest rate of 3.75%.)

Recall that Joe and Lauren have a student loan from Part 1 of the project. Student loan interest is a special case. They can claim the student loan interest deduction even if they don't itemize their deductions. For simplicity, assume that their first student loan payment occurred on January 1, 2020. (Joe and Lauren owe $34,000 on their student loans at an interest rate of 5%. The term is 20 years)

(2 points) Did Joe and Lauren claim the standard deduction or itemize their deductions? Explain your decision, and show all of your calculations.