Mike Webb, married to Nancy Webb, is employed by a large pharmaceutical company and earns a salary. In addition, Mike is an entrepreneur and has two small businesses on the side, both of which operate as a sole proprietorships. One is a profitable consulting business where Mike provides financial and retirement advice to pharmacists. The other involves the manufacturer of Christmas novelties in China, selling the products in gift shops in the US. This business is struggling. However, Mike feels the Christmas novelty business has great potential. Mike reports the following for 2015: Salary: 150000 Consulting practice: Revenues- 65000 Ordinary Expenses-12000

Sole Proprietorship: Revenues - 22000 ordinary expenses - 40000

interest (none tax exempt) : 3000

Dividends (qualified): 9000

LTCG : 24000

STCL: (4000)

Itemized Deductions: state and local taxes: 14000 real estate taxes: 8000 mortgage interest on personal residence: 7000 charitable contributions: 8000

Child care expenses:

The webbs have two dependent children, ages 13 and 11, and pay child care expenses of $4,000 per year for each child. Nancy is not employed, but is a full time student (all of 2015) at State University, majoring in Accounting.

Federal Income Tax withheld from Salary: $21,000

Estimated Taxes paid for 2015: $14,000

For 2014, Mike and Nancy's AGI was $175,000 and their actual federal income tax liability was $29,000.

a. Computethe Webbs regualr federal income tax liability for 2015, including self employment taxes.