1. Juliet and Bobby are married. They have two children. Together, they make $160,000 a year and file jointly. Additionally, they contribute $7,000 to an HSA and $12,000 to a 401(k). Finally, they have paid $13,000 in mortgage loan interest and $12,000 in state and local taxes. They also donate an additional $1,200 annually to their favorite charities.
   1. What is their taxable income in 2020? Be sure to separate above the line vs. below the line deductions.
   2. What is their tax liability (tax owed)? Be sure to address any credits.
   3. How would their tax liability change if they saved an additional $1,000 in the 401(k)? What is the effective cost of the savings?
   4. How would their tax liability change (show calculations) if they only rented and thus had no mortgage interest and only $8,000 in state and local taxes?
   5. Extra Credit: How would their tax liability change if they filed these taxes in 2017 (pre-Trump Tax Cuts)? Be specific assume the standard deduction for married couples is $12,700, the personal exemption is $4,050, and the child tax credit is $1,000. You can assume the marginal tax rate schedule remains the same.