Note: This problem is for the 2020 tax year.

Lance H. and Wanda B. Dean are married and live at 431 Yucca Drive, Santa Fe, NM 87501. Lance works for the convention bureau of the local Chamber of Commerce, and Wanda is employed part-time as a paralegal for a law firm.

During 2020, the Deans had the following receipts:

Salaries ($60,000 for Lance, $42,000 for Wanda)				$102,000
Interest income
City of Albuquerque general purpose bonds		$1,000
Ford Motor company bonds		1,100
Ally Bank certificate of deposit		400		2,500
Child support payments from John Allen				7,200
Annual gifts from parents				26,000
Settlement from Roadrunner Touring Company				90,000
Lottery winnings				600
Federal income tax refund (for tax year 2019)				400

Wanda was previously married to John Allen. When they divorced several years ago, Wanda was awarded custody of their two children, Penny and Kyle. (Note: Wanda has never issued a Form 8332 waiver.) Under the divorce decree, John was obligated to pay alimony and child supportthe alimony payments were to terminate if Wanda remarried.

In July, while going to lunch in downtown Santa Fe, Wanda was injured by a tour bus. Because the driver was clearly at fault, the owner of the bus, Roadrunner Touring Company, paid her medical expenses (including a one-week stay in a hospital). To avoid a lawsuit, Roadrunner also transferred $90,000 to her in settlement of the personal injuries she sustained.

The Deans had the following expenditures for 2020:

Medical expenses (not covered by insurance)				$7,200
Taxes
Property taxes on personal residence		$3,600
State of New Mexico income tax (includes amount withheld
from wages during 2020)		4,200		7,800
Interest on home mortgage (First National Bank)				6,000
Charitable contributions (cash)				3,600
Life insurance premiums (policy on Lance's life)				1,200
Contribution to traditional IRA (on Wanda's behalf)				6,000
Traffic fines				300
Contribution to the reelection campaign fund of the mayor of Santa Fe				500
Funeral expenses for Wayne Boyle				6,300

The life insurance policy was taken out by Lance several years ago and designates Wanda as the beneficiary. As a part-time employee, Wanda is excluded from coverage under her employer's pension plan. Consequently, she provides for her own retirement with a traditional IRA obtained at a local trust company. Because the mayor is a member of the local Chamber of Commerce, Lance felt compelled to make the political contribution.

The Deans' household includes the following, for whom they provide more than half of the support:

	Social Security Number	Birth Date
Lance Dean (age 42)	123-45-6786	12/16/1978
Wanda Dean (age 40)	123-45-6787	08/08/1980
Penny Allen (age 19)	123-45-6788	10/09/2001
Kyle Allen (age 16)	123-45-6780	05/03/2004
Wayne Boyle (age 75)	123-45-6785	06/15/1945

Penny graduated from high school on May 9, 2020, and is undecided about college. During 2020, she earned $8,500 (placed in a savings account) playing a harp in the lobby of a local hotel. Wayne is Wanda's widower father who died on December 20, 2020. For the past few years, Wayne qualified as a dependent of the Deans.

Federal income tax withheld is $3,900 (Lance) and $1,800 (Wanda). The proper amount of Social Security and Medicare tax was withheld. The Deans received the appropriate coronavirus recovery rebates (economic impact payments); related questions in ProConnect Tax should be ignored.

Required:

Determine the Federal income tax for 2020 for the Deans on a joint return by completing the appropriate forms. Use Form 1040 and Schedule 1 to complete this tax return. They do not own and did not use any virtual currency during the year, and they do not want to contribute to the Presidential Election Campaign Fund. If an overpayment results, it is to be refunded to them.

• Make realistic assumptions about any missing data.
• Enter all amounts as positive numbers.
• If an amount box does not require an entry or the answer is zero, enter "0".
• Use the tax rate schedules included with this problem. When computing the tax liability, do not round your immediate calculations. If required round your final answers to the nearest dollar.
• 

25d 5,700 26 d Add lines 25a through 25c... If you have a 26 2020 estimated tax payments and amount applied from 2019 return qualifying child, attach Sch. EIC. 27 Earned income credit (EIC)... If you have 27 nontaxable Additional child tax credit. Attach Schedule 8812. combat pay, see 28 28 instructions. American opportunity credit from Form 8863, line 8.... 29 29 Recovery rebate credit. See instructions ... 30 30 Amount from Schedule 3, line 13 31 31 32 Add lines 27 through 31. These are your total other payments and refundable credits 32 33 33 5,700 Add lines 25d, 26, and 32. These are your total payments ... If line 33 is more than line 24, subtract line 24 from line 33. This is the amount you overpaid. Refund 34 34 35a 0 35a Amount of line 34 you want refunded to you. If Form 8888 is attached, check here - Routing number r Tvne Checking Savinns Direct donosit