Lance H. and Wanda B, Dean are married. Lance works for the convention bureau of the local Chamber of Commerce, while Wanda is employed part-time by a law firm as a paralegal.

During 2013, the Deans had the following receipts:

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

Interest income-

City of New York general purpose bonds $1,000

Ford Motor Company bonds 1,100

Ally Bank certificate of deposit 400

Child support payments from John Allen 7,200

Annual gifts from parents26,000

Settlement from Roadrunner Touring Company 90,000

Lottery winnings600

Federal income tax refund (for tax year 2012) 400

Wanda was previously married to John Allen. When they divorced several years ago, Wanda was awarded custody of their two children, Penny and Kyle. Under the divorce decree, John was obligated to pay alimony and child support the 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. As 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 in settlement of the personal injuries she sustained.

The Deans had the following expenditures for 2013:

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 2013) 4,200

Interest on home mortage 6000

Paid church pledge 3600

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

Contribution to traditional IRA (on Wanda's behalf) 5000

Traffic fines 300

Contribution to the reelection campain fund of the mayor of Santa Fe 500

Funeral expenses for Wayne Boyle 6300

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 employers 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 Deans household includes the following, for whom they provide more than half of the support:

Lance Dean (age 42)

Wanda Dean (age 40)

Penny Allen (age 19)

Kyle Allen (age 17)

Wayne Boyle (age 75)

Penny graduated from high school on May 9, 2013 and is undecided about college. During 2013, she earned $8,500 (placed in a savings account) playing a harp in the lobby of a local hotel. Wayne is Wandas widower father who died on January 20, 2013. For the past few years, Wayne qualified as a dependent of the Deans.

Federal income tax withheld is $5,200 (Lance) and $3,100 (Wanda). The proper amount of Social Security and Medicare tax was withheld.

Determine the Federal income tax for 2013 for the Deans on a joint return by completing the appropriate forms. They do not want to contribute to the Presidential Election Campaign Fund. If an overpayment results, it is to be refunded to them. Suggested software: H&R BLOCK At Home.