**Not sure I have medical expenses and credits correct **

Reba Dixon is a fifth-grade school teacher who earned a salary of $38,300 in 2018. She is 45 years old and has been divorced for four years. She receives $1,260 of alimony payments each month from her former husband (divorced in 2016). Reba also rents out a small apartment building. This year Reba received $50,000 of rental payments from tenants and she incurred $19,500 of expenses associated with the rental.

Reba and her daughter Heather (20 years old at the end of the year) moved to Georgia in January of this year. Reba provides more than one-half of Heathers support. They had been living in Colorado for the past 15 years, but ever since her divorce, Reba has been wanting to move back to Georgia to be closer to her family. Luckily, last December, a teaching position opened up and Reba and Heather decided to make the move. Reba paid a moving company $2,130 to move their personal belongings, and she and Heather spent two days driving the 1,450 miles to Georgia.

Reba rented a home in Georgia. Heather decided to continue living at home with her mom, but she started attending school full-time in January at a nearby university. She was awarded a $3,120 partial tuition scholarship this year, and Reba helped out by paying the remaining $500 tuition cost. If possible, Reba thought it would be best to claim the education credit for these expenses. Reba wasn't sure if she would have enough items to help her benefit from itemizing on her tax return. However, she kept track of several expenses this year that she thought might qualify if she was able to itemize. Reba paid $5,920 in state income taxes and $12,620 in charitable contributions during the year. She also paid the following medical-related expenses for herself and Heather:

Insurance premiums $ 5,915

Medical care expenses $ 1,220

Prescription medicine $ 470

Nonprescription medicine $ 220

New contact lenses for Heather $ 320

Shortly after the move, Reba got distracted while driving and she ran into a street sign. The accident caused $1,020 in damage to the car and gave her whiplash. Because the repairs were less than her insurance deductible, she paid the entire cost of the repairs. Reba wasnt able to work for two months after the accident. Fortunately, she received $2,120 from her disability insurance. Her employer, the Central Georgia School District, paid 60% of the premiums on the policy as a nontaxable fringe benefit and Reba paid the remaining 40% portion.

A few years ago, Reba acquired several investments with her portion of the divorce settlement. This year she reported the following income from her investments: $2,320 of interest income from corporate bonds and $1,620 interest income from the City of Denver municipal bonds. Overall, Rebas stock portfolio appreciated by $12,120 but she did not sell any of her stocks.

Heather reported $6,440 of interest income from corporate bonds she received as gifts from her father over the last several years. This was Heathers only source of income for the year.

Reba had $10,000 of federal income taxes withheld by her employer. Heather made $1,000 of estimated tax payments during the year. Reba did not make any estimated payments. Reba had qualifying insurance for purposes of the Affordable Care Act (ACA).

a. Determine Rebas federal income taxes due or taxes payable for the current year.

My calculations:

Gross income: 38,300+15,120+50,000+1,272+2,320 = 107,012 - Rental expense:19,500 = 87,512 AGI

Itemized deduction: medical 0 + state 5920 + charitable 12620 = 18,540> Standard deduction: HOH 18,000

Taxable income: 68,972 (87,512 - 18,540)

Tax on taxable income: 9,722 ([68,972-51,800 x 22%] +5,944)

Credits: 6,600 (AOC: 500 + QBI: 6100)

Tax prepayments: 10,000

Tax Refund: 6,878

**Not sure I have medical expenses and credits correct **

Medical expenses total: $4276? (Gross Income 87,512 X 7.5% = 6563) so zero is deductible? ([5915 x 40%]+1120+470+320)=4276

Credits: AOC credit of $500, should it include QBI? QBI credit would be $6,100? (30,500 x 20%=6,100) so can take the full QBI because [(AGI: 87,512 - itemized ded: 18,540 = 68,972, taxable income) x 20%=13,758]