Marty and Penny Lyons have always filed a joint tax return since their marriage in 2008, they have 3 children, Ben 10, Bobby 6 and Carol 2. Marty works as an electrician and his salary is $110,000, of which the company withheld $22,653 for federal income taxes. Penny stays at home and has not worked since she was injured in 2017 on her job as a doctor’s assistant. After she was injured in October of 2017 she received workman’s compensation of $16,000.00, which helped her with credit card debt. They have interest income of $3,000 from AT&T bonds which Penny’s father gave them 10 years ago. They also receive dividends from domestic corporations equaling to $1,000. They have paid insurance premiums of $9,533.00, and Penny still has to go to the doctor twice a week, which is 12 miles from their house and costs them a co-pay of $20.00. The doctor has prescribed pain killers for her which are refilled every month and costs a co-pay of $10.00 per refill. While at the pharmacy she picks up Vitamin C for Bobby, because he is always getting colds, which costs her $5.25 for a 30 day bottle. They bought their home 3 years ago for $250,000 at a 6% fixed rate, at the time they put down $35,000 and closing costs were $6750.00. They live in a good school district and their real estate taxes cost $8200.00, they like to pay this together with their mortgage and only make one payment of $1534.00 per month. Their mortgage interest is 35% of their mortgage payment. When it comes to Carol they feel that is important that she plays with other children her age, so they enrolled her in a child care facility for 3 days a week, 3 hours a day. They charge it to their credit card and have paid $5,340 in credit card interest last year. They paid $3,640.00 in state income tax and $2400.00 in sales tax. They both came from charitable family’s and believe in giving to others throughout the year, they donate $23.00 per week to their church, $188.00 per month to the Wounded Warriors foundation and $1,865.00 throughout the year in clothes and household goods to the Salvation Army. Marty pays union dues for the year totaling $1144.00 and last year the tax preparer charged them $300.00 to prepare their taxes which was more than the year before. They are hoping not to pay as much to you this year.

Determine their taxable income and tax liability, based on the tax rate schedules for 2021.