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Julie works as a nurse. This year she earned $68,000 in salary income. Julies employer withheld $9,000 in federal income tax from her salary. Julie

Julie works as a nurse. This year she earned $68,000 in salary income. Julies employer withheld $9,000 in federal income tax from her salary. Julie is not married. She has a 4 year-old daughter Cassandra that lived with Julie all year. Julie provided all of Cassandras support. In March of the current year, Kim moved in with Julie after Kims mom became ill. Kim is 15 and is unrelated to Julie. Julie provided all of Kims support from March to December.

Julie invests in a few stocks. During the current year, she had the following stock transactions:

Stock

Sales Price

Tax Basis

Holding Period

Apple

$21,000

$11,000

3 years

Orange

$5,000

$2,000

6 months

You are completing Julies tax return and she gives you the following list of expenses:

Home mortgage interest (acquisition debt of $320,000) $7,500

Real estate taxes $9,200

State income taxes paid $4,300

Medical expenses for prescription drugs, eyeglasses, dentist visits $9,600

Charitable contributions (cash to United Way and Goodwill) $200

Contribution to the political campaign of Senator from her state $700

Child care expenses for Cassandra $4,850

Julie went to the casino three times during the year. On her first trip, she won $11,550 playing Blackjack. Unfortunately, on the other two trips, she lost $2,500 and $6,000, respectively. Finally, Julies ex-husband paid her $8,000 in alimony.

What is Julies AGI (line 8b on Form 1040), taxable income (line 11b), income tax liability (line 12a), total tax (line 16) and refund amount/amount owed?

Use 2018 tax rate schedule (appendix D from the book)

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