Note: This problem is for the 2019 tax year.

Alfred E. Old and Beulah A. Crane, each age 42, married on September 7, 2017. Alfred and Beulah will file a joint return for 2019. Alfred's Social Security number is 111-11-1109. Beulah's Social Security number is 123-45-6780, and she adopted "Old" as her married name. They live at 211 Brickstone Drive, Atlanta, GA 30304.

Alfred was divorced from Sarah Old in March 2016. Under the divorce agreement, Alfred is to pay Sarah $1,250 per month for the next 10 years or until Sarah's death, whichever occurs first. Alfred pays Sarah $15,000 in 2019. In addition, in January 2019, Alfred pays Sarah $50,000, which is designated as being for her share of the marital property. Also, Alfred is responsible for all prior years' income taxes. Sarah's Social Security number is 123-45-6788.

Alfred's salary for 2019 is $150,000. He is an executive working for Cherry, Inc. (Federal I.D. No. 98-7654321). As part of his compensation package, Cherry provides him with group term life insurance equal to twice his annual salary. His employer withheld $24,900 for Federal income taxes and $8,000 for state income taxes. The proper amounts were withheld for FICA taxes.

Beulah recently graduated from law school and is employed by Legal Aid Society, Inc. (Federal I.D. No. 11-1111111), as a public defender. She receives a salary of $42,000 in 2019. Her employer withheld $7,500 for Federal income taxes and $2,400 for state income taxes. The proper amounts were withheld for FICA taxes.

Alfred and Beulah had interest income of $500. Alfred and Beulah receive a $1,900 refund on their 2018 state income taxes. They claimed the standard deduction on their 2018 Federal income tax return. Alfred and Beulah pay $4,500 interest and $1,450 property taxes on their personal residence in 2019. Their charitable contributions total $2,400 (all to their church). They paid sales taxes of $1,400, for which they maintain the receipts. Both spouses had health insurance for all of 2019 and they do not want to contribute to the Presidential Election Campaign.

Required:

Compute the Olds' net tax payable (or refund due) for 2019. Use Form 1040 and Schedule 1 to complete this tax return.

Schedule 1

1 Wages, salaries, tips, etc. Attach Form(s) W-2 1 b 2a Tax-exempt interest .. 2 Taxable interest. Attach Sch. B if required 2b 500 Standard b 3a Qualified dividends ... Ordinary dividends. Attach Sch. B if required 3b 4b 4c 4d 4a IRA distributions ..... 4a b Taxable amount Pensions and annuities d Taxable amount. 5a Social security benefits b Taxable amount 6 Capital gain or loss). Attach Schedule D if required. If not required, check here ... 5a 5b 6 za Other income from Schedule 1, line 9...... 7a Deduction for- Single or Married filing separately, $12,200 Married filing jointly or Qualifying widow(er), $24,400 Head of household, $18,350 If you checked any box under Standard Deduction, see instructions. b Add lines 1, 2b, 3b, 46, 40, 56, 6, and 7a. This is your total income 7b X 8a Adjustments to income from Schedule 1, line 22. 8a b Subtract line 8a from line 7b. This is your adjusted gross income 8b 9 9 24,400 Standard deduction or itemized deductions (from Schedule A) ..... Qualified business income deduction. Attach Form 8995 or Form 8995-A. 10 10 11a Add lines 9 and 10 . 11a b Taxable income. Subtract line 11a from line 8b. If zero or less, enter -- 11b BAA For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Form 1040 (2019) Form 1040 (2019) Alfred E. and Beulah A. Old 111-11-1109 Page 2 12a Tax (see inst.) Check if any from Form(s): 1 8814 2 0 4972 30 12a b Add Schedule 2, line 3, and line 12a and enter the total 12b 13a Child tax credit or credit for other dependents .. 13a b Add Schedule 3, line 7, and line 13a and enter the total 13b 14 Subtract line 13b from line 12b. If zero or less, enter -0- 14 15 Other taxes, including self-employment tax, from Schedule 2, line 10 15 16 Add lines 14 and 15. This is your total tax ..... 16 17 Federal income tax withheld from Forms W-2 and 1099 17 18 Other payments and refundable credits: a Earned income credit (EIC) 18a . If you have a qualifying child, attach Sch. EIC. If you have nontaxable combat pay, see instructions. b Additional child tax credit. Attach Schedule 8812 18b c American opportunity credit from Form 8863, line 8. 18c 18e 18d d Schedule 3, line 14 .. e Add lines 18a through 18d. These are your total other payments and refundable credits ... 19 Add lines 17 and 18e. These are your total payments ... 20 If line 19 is more than line 16, subtract line 16 from line 19. This is the amount you overpaid .... 21a Amount of line 20 you want refunded to you. If Form 8888 is attached, check here 19 Refund 20 21a Direct deposit? Routing number c Type: Checking Savings See instructions. d Account number 22 Amount of line 20 you want applied to your 2020 estimated tax.. 22 Schedule 1 111-11-1109 Alfred E. and Beulah A. Old At any time during 2019, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?.... 0 Yes No Part I Additional Income 1 Taxable refunds, credits, or offsets of state and local income taxes 1 2a Alimony received 2a b Date of original divorce or separation agreement (see instructions) 3 Business income or loss). Attach Schedule C. 3 4 Other gains or losses). Attach Form 4797. 4 5 5 6 6 Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E Farm income or loss). Attach Schedule F Unemployment compensation .. Other income. List type and amount Group Term Life Insurance 7 7 8 8 9 Combine lines 1 through 8. Enter here and on Form 1040 or 1040-SR, line 7a 9 Part II Adjustments to Income 10 Educator expenses 10 11 Certain business expenses of reservists, performing artists, and fee-basis government officials. Attach Form 2106 .. 11 12 Health savings account deduction. Attach Form 8889 12 13 Moving expenses for members of the Armed Forces. Attach Form 3903 13 14 Deductible part of self-employment tax. Attach Schedule SE 14 15 Self-employed SEP, SIMPLE, and qualified plans 15 17 Penalty on early withdrawal of savings. 17 18a Alimony paid .. 18a b Recipient's SSN.. 123-45-6788 c Date of original divorce or separation agreement (see instructions) 03/2016 19 IRA deduction 19 20 Student loan interest deduction 20 21 Tuition and fees. Attach Form 8917 21 22 Add lines 10 through 21. These are your adjustments to income. Enter here and on Form 1040 or 1040-SR, line 8a . . . . . . . . . . . . . . . . . . . . . . . ....................... 22 BAA For Paperwork Reduction Act Notice, see your tax return instructions. Schedule 1 (Form 1040 or 1040-SR) 2019