Note: This problem is for the 2020 tax year.

Alfred E. Old and Beulah A. Crane, each age 42, married on September 7, 2018. Alfred and Beulah will file a joint return for 2020. Alfred's Social Security number is 111-11-1109. Beulah's Social Security number is 123-45-6780, and she has chosen to use "Old" as her married name. They live at 211 Brickstone Drive, Atlanta, GA 30304.

Alfred was divorced from Sarah Old in March 2017. 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 paid Sarah $15,000 in 2020. In addition, in January 2020, Alfred paid 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 2020 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 received a salary of $42,000 in 2020. 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 received taxable interest income of $500. Alfred and Beulah received a $1,900 refund on their 2019 state income taxes; they claimed the standard deduction on their 2019 Federal income tax return. Alfred and Beulah paid $4,500 interest and $1,450 property taxes on their personal residence in 2020. They paid sales taxes of $1,400, for which they maintain the receipts. Alfred and Beulah have never owned or used any virtual currency, and they do not want to contribute to the Presidential Election Campaign. Alfred and Beulah received the appropriate coronavirus recovery rebates (economic impact payments); related questions in ProConnect Tax should be ignored.

Required:

Compute the Olds' net tax payable (or refund due) for 2020. Use Form 1040 and Schedule 1 to complete this tax return.

note: group term life insurance is $300

• It may be necessary to complete the tax schedule and worksheet before completing Form 1040.
• Enter all amounts as positive numbers.
• If an amount box does not require an entry or the answer is zero, enter "0".
• Make realistic assumptions about any missing data.
• When computing the tax liability, do not round your immediate calculations. If required round your final answers to the nearest dollar.
• Use the 2020 Tax Rate Schedule provided. Do not use the Tax Tables.
• Use the 2020 Tax Rate Schedules to compute the tax. (Note: Because the tax rate schedules are used instead of the tax tables, the amount of tax computed may vary slightly from the amount listed in the tables.)

1. 2020 Tax Rate Schedules
   SingleSchedule X										Head of householdSchedule Z
   If taxable income is: Over		But not over		The tax is:				of the amount over			If taxable income is: Over		But not over		The tax is:				of the amount over
   $ 0		$ 9,875		. . . . . .		10%		$ 0			$ 0		$ 14,100		. . . . . .		10%		$ 0
   9,875		40,125		$ 987.50	+	12%		9,875			14,100		53,700		$ 1,410.00	+	12%		14,100
   40,125		85,525		4,617.50	+	22%		40,125			53,700		85,500		6,162.00	+	22%		53,700
   85,525		163,300		14,605.50	+	24%		85,525			85,525		163,300		13,158.00	+	24%		85,500
   163,300		207,350		33,271.50	+	32%		163,300			163,300		207,350		31,830.00	+	32%		163,300
   207,350		518,400		47,367.50	+	35%		207,350			207,350		518,400		45,926.00	+	35%		207,350
   518,400		. . . . . .		156,235.00	+	37%		518,400			518,400		. . . . . .		154,793.50	+	37%		518,400
   Married filing jointly or Qualifying widow(er)Schedule Y-1										Married filing separatelySchedule Y-2
   If taxable income is: Over		But not over		The tax is:				of the amount over			If taxable income is: Over		But not over		The tax is:				of the amount over
   $ 0		$ 19,750		. . . . . .		10%		$ 0			$ 0		$ 9,875		. . . . . .		10%		$ 0
   19,750		80,250		$ 1,975.00	+	12%		19,750			9,875		40,125		$ 987.50	+	12%		9,875
   80,250		171,050		9,235.00	+	22%		80,250			40,125		85,525		4,617.50	+	22%		40,125
   171,050		326,600		29,211.00	+	24%		171,050			85,525		163,300		14,605.50	+	24%		85,525
   326,600		414,700		66,543.00	+	32%		326,600			163,300		207,350		33,271.50	+	32%		163,300
   414,700		622,050		94,735.00	+	35%		414,700			207,350		311,025		47,367.50	+	35%		207,350
   622,050		. . . . . .		167,307.50	+	37%		622,050			311,025		. . . . . .		83,653.75	+	37%		311,025