John and Mary Smith live at 100 Main Street in Boston, MA 02124. They are filing as a married couple.

They live with their children, Robert and Alice who are single with no dependents of their own.

Person Social Security Number Date of Birth

John Smith 123-45-6789 02/02/1970

Mary Smith 987-65-4321 03/01/1971

Robert Smith 542-91-1122 01/01/2005

Alice Smith (Full-time College Student) 254-19-2211 02/01/2000

Facts

John and Mary received the first Economic Impact Payment of $2400 plus $500 for each qualifying child in 2020.

They also received the second Economic Impact Payment of $1200 plus $600 for each qualifying child in January 2021.

John and Mary are employed as high school teachers and spend $300 each out of their own pockets to purchase school supplies for their students. Their A.I for 2020 was $110,000. They provide more than 50% of the support for all members of the household. They do not contribute to the Presidential Election Campaign nor do they have any dealings in virtual currency, otherwise known as Bitcoin.

Alice attended Bunker Hill Community College and paid $6,000 in tuition; she received a Form 1098-T with all of the required information. Assume that she qualifies for the tuition credit. Alice earned $30,000 from a full-time job.

Lastly, there are no additional items of income. They had $10,000 in federal income taxes and $9,000 in state taxes withheld from their wages. They paid $15,000 in mortgage interest, $3,000 in real estate taxes and also paid $6,000 in out-of-pocket medical expenses. They contributed $5,000 to charity and have the receipts. They play the lottery and have $500 in losses.

Required:

Prepare all necessary forms.

Using the above information, prepare a Form 1040. Do they have a refund or a balance due?