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Nick and David are married and have two dependent children, Michelle ( age 1 8 ) and Robert ( age 1 0 ) . Michelle

Nick and David are married and have two dependent children, Michelle (age 18) and Robert (age 10). Michelle is currently in college at State University. Nick works as an accountant for a construction company while David is self-employed as an interior designer and manages his business from their home. Neither Nick nor David is blind or over age 65, and they plan to file jointly. Nick and David are entitled to claim a child tax credit in the amount of $2,500 for the two children.
Using the standard format for the Individual Income Tax Formula, determine Nick and Davids gross income, AGI, taxable income, tax liability, and final income tax due/refund for the current year. For each income item in the list, please note whether the item is included or excluded from gross income on the "Homework Calculations" tab which contains your supporting calculations. For each expenditure, please note whether the item is (a) deductible as a for AGI deduction, (b) deductible as a from AGI deduction, or (c) not deductible on the "Homework Calculations" tab which contains your supporting calculations. Nick and David have provided the following information:
Income:
Nick's salary 94,000
David's interior design business income (sole proprietor)12,000
Expenditures:
Federal income tax withheld from Nicks wages 9,200
State income tax withheld from Nicks wages 4,500
Social Sec. & Medicare tax withheld from Nicks wages 7,191
Real estate tax on residence 7,400
State sales tax paid 2,700
Home mortgage interest 12,750
Interest on personal credit card 2,000
Medical expenses (unreimbursed)4,300
Gambling losses 2,800
Davids business expenses (sole proprietor)5,500
Self-employment tax on Davids income 1,696
Cash contribution to the American Red Cross Disaster Relief 500
Michelles room and board at college 13,000
Interest on loans to pay Michelles tuition 2,900
Contribution to Roth IRA account 5,100
Stock contribution to youth charity (basis=3,000)8,000***(FMV); Owned for 5 years
Using the standard format for the Individual Income Tax Formula, determine Nick and Davids gross income, AGI, taxable income, tax liability, and final income tax due/refund for the current year. For each income item in the list, please note whether the item is included or excluded from gross income on the "Homework Calculations" tab which contains your supporting calculations. For each expenditure, please note whether the item is (a) deductible as a for AGI deduction, (b) deductible as a from AGI deduction, or (c) not deductible on the "Homework Calculations" tab which contains your supporting calculations. Nick and David have provided the following information:

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