Marg and Phil Foster are married with a four-year-old daughter and nine-year-old son, both of whom live with them and they financially support. In 2013, Marg and Phil realize the following items of income and expense:

a. Phil salary - $49,000

b. Marg salary - $18,500

c. Interest income from a savings account - $500

d. Interest income from City of Savannah municipal bonds - $350

e. Alimony paid by Phil to his ex-wife, Susan - $9,600

f. Qualifying medical expenses - $22,000

They had a combined total of $2,500 federal withholding from their paychecks and made estimated federal tax payments of $500 each quarter. For purposed of this problem, assume they qualified for $1,000 of child tax credit.

Calculate the following

a. Gross income (i.e. income before any for AGI deductions)

b. Adjusted gross income

c. Taxable income

d. Tax liability

e. Tax due or tax refund & the amount