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Mike (age 40) and Carol (age 39) Brady are married. Carol works as a retail manager and Mike is a self-employed architect but does not

Mike (age 40) and Carol (age 39) Brady are married. Carol works as a retail manager and Mike is a self-employed architect but does not maintain a home office. Their2016tax and other information are as follows:

Salary Carol

80,000

Federal withholding on salary

20,000

State withholding on salary

5,000

Interest income on municipal bonds:

State of Connecticut

2,000

Savings account interest

1,000

Dividends from RGR, Inc. (all are non-qualified)

4,000

Value of employer provided medical insurance

3,000

Inheritance from Carols fathers estate

7,000

Interest paid on personal car loan

1,500

Interest paid on personal loan

1,000

Child support paid to Mikes ex-wife

10,000

Alimony paid to Mikes ex-wife

6,000

Qualified Out of Pocket Medical Expenses

3,000

Donations to church

Real Estate taxes on primary residence

2,500

6,000

Mortgage interest on primary residence (<$1M)

4,000

Mikes business revenues

50,000

Mikes business expenses

15,000

Required: Using the tax formula format, determine the following for the Bradys2016 tax year(show all calculations):

All Income $___________

Exclusions (if any) $ ___________

Gross income (including Mikes SE income) $ ___________

Deductions For AGI $ ___________

Adjusted gross income $ ___________

Itemized deduction or standard deduction amount $ ___________

Deduction for exemptions $ ___________

Taxable income $ ___________

Income tax liability $ ___________

Self-employment tax liability $ ___________

Net tax due or refund (show calculation) $ ___________

Remember:This is for the 2016 tax year. You must use appropriate 2016 amounts for standard deduction, exemptions, and tax calculations.

PLEASE SHOW CALCULATIONS. Thanks!!

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