Lance H. and Wanda B. Dean are married and live at 431 Yucca Drive, Santa Fe, NM 87501. Lance works for the convention bureau of the local Chamber of Commerce, and Wanda is employed part-time as a paralegal for a law firm. During 2019, the Deans recorded the following receipts.

Salaries ($60,000 for Lance, $41,000 for Wanda) $101,000

Interest income

City of Albuquerque general purpose bonds $1,000

Ford Motor company bonds 1,100

Ally Bank certificate of deposit 400 2,500

Child support payments from John Allen 7,200

Annual gifts from parents 26,000

Settlement from Roadrunner Touring Company 90,000

Lottery winnings 600

Federal income tax refund (for tax year 2018) 400

Wanda previously was married to John Allen. When they divorced in 2013, Wanda was awarded custody of their two children, Penny and Kyle. (Note: Wanda has never issued a Form 8332 waiver.) Under the divorce decree, John was obligated to pay alimony and child supportthe alimony payments were to terminate if Wanda remarried. In July, while going to lunch in downtown Santa Fe, Wanda was injured by a tour bus. Because the driver was clearly at fault, the owner of the bus, Roadrunner Touring Company, paid her medical expenses (including a one-week stay in a hospital). To avoid a lawsuit, Roadrunner also transferred to her $90,000 cash in settlement of the personal injuries she sustained. The Deans made the following 2019 expenditures.

Medical expenses (not covered by insurance) $7,200

Taxes

Property taxes on personal residence $3,600

State of New Mexico income tax (includes amount withheld

from wages during 2019) 4,200 7,800

Interest on home mortgage (First National Bank) 6,000

Charitable contributions 3,600

Life insurance premiums (policy on Lance's life) 1,200

Contribution to traditional IRA (on Wanda's behalf) 5,000

Traffic fines 300

Contribution to the reelection campaign fund of the

mayor of Santa Fe 500

Funeral expenses for Wayne Boyle 6,300

The life insurance policy was taken out by Lance several years ago and designates Wanda as the beneficiary. As a part-time employee, Wanda is excluded from coverage under her employer's pension plan. Consequently, she provides for her own retirement with a traditional IRA obtained at a local trust company. Because the mayor is a member of the local Chamber of Commerce, Lance felt compelled to make the political contribution. The Dean household includes the following, for whom they provide more than half of the support.

Lance Dean (age 42)123-45-678612/16/1976

Wanda Dean (age 40)123-45-678708/08/1978

Penny Allen (age 19)123-45-678810/09/1999

Kyle Allen (age 16)123-45-678005/03/2002

Wayne Dean (age 75)123-45-678506/15/1943

Penny graduated from high school on May 9, 2019, and is undecided about college. T

During 2019, she earned $8,500 (placed in a savings account) playing a harp in the lobby of a local hotel. Wayne is Wanda's widower father who died on December 20, 2019. For the past few years, Wayne qualified as a dependent of the Deans.

Federal income tax withheld is $3,900 (Lance) and $1,800 (Wanda). The proper amount of Social Security and Medicare tax was withheld.

Required:

Determine the Federal income tax for 2019 for the Deans on a joint return by completing the appropriate forms. Use Form 1040 and Schedule 1 to finish this tax return. They do not own and did not use any virtual currency during the year, and they do not want to contribute to the Presidential Election Campaign Fund. If an overpayment results, it is to be refunded to them.

• Make realistic assumptions about any missing data.
• Enter all amounts as positive numbers.
• If an amount box does not require an entry or the answer is zero, enter "0".
• Use the tax rate schedules included with this problem. When computing the tax liability, do not round your immediate calculations. If required round your final answers to the nearest dollar.