Joe's salary: $120,541

Joe and Jessie have been married for four years and do not have any children. Joe was married previously and had one child from the prior marriage (divorced in 2012). 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). Neither Joe nor Jessie is blind or over age 65, and they plan to file as married joint. Based on their estimates, determine Joe and Jessie's AGI and taxable income for 2019. Joe and Jessie have the following income and expenses in 2019: Income: Joe's salary $ 120,xxx Jessie's craft sales 18,400 Interest from certificate of deposit 1,650 Interest from Treasury bond funds 716 Interest from municipal bond funds 920 Gambling winning 200 Expenditures: Federal income tax withheld from Joe's wages $ 13,700 State income tax withheld from Joe's wages 6,400 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 credit card 2,300 Medical expenses (unreimbursed) 1,690 Joe's employee expenses (unreimbursed) 2,400 Cost of Jessie's craft supplies 4,260 Postage for mailing crafts 145 Travel and lodging for craft shows 2,230 Cash contributions to Red Cross 500 Gambling loss 2000 Alimony payment 5,000 Child support 3,000 Contribution to traditional IRA 4,000 Fee paid for preparation of 2018 income tax return 800