Please help me with answering these questions!

Note: This problem is for the 2018 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 2018, the Deans recorded the following receipts. Salaries ($60,000 for Lance, $41,000 for Wanda) $101,000 Interest income- City of Albuquerque general purpose bonds Ford Motor Company bonds Ally Bank certificate of deposit $1,000 1,100 400 Child support payments from John Allen 2,500 7,200 26,000 90,000 Annual gifts from parents Settlement from Roadrunner Touring Company Lottery winnings Federal income tax refund (for tax year 2017) 600 400 Wanda previously married to John Allen. When they divorced in 2018, 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 support-the 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 to her $90,000 cash in settlement of the personal injuries she sustained. 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 to her $90,000 cash in settlement of the personal injuries she sustained. The Deans made the following 2018 expenditures. $7,200 $3,600 Medical expenses (not covered by insurance) Taxes- Property taxes on personal residence State of New Mexico income tax (includes amount withheld from wages during 2018) Interest on home mortgage 4,200 Gifts to charity 7,800 6,000 3,600 1,200 5,000 Life insurance premiums (policy on Lance's life) Contribution to traditional IRA (on Wanda's behalf) Traffic fines 300 500 Contribution to the reelection campaign fund of the mayor of Santa Fe 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 Dean household includes the following, for whom they provide more than half of the support. Social Security Number Birth Date 123-45-6786 12/16/1976 123-45-6787 Lance Dean (age 42) Wanda Dean (age 40) Penny Allen (age 19) Kyle Allen (age 17) Wayne Dean (age 75) 123-45-6788 08/08/1978 10/09/1999 05/03/2002 06/15/1943 123-45-6780 123-45-6785 Penny graduated from high school on May 9, 2018, and is undecided about college. This year, she earned $8,500 (placed in a savings account) playing a harp in the lobby of a local hotel. Wayne is Lance's widower father who died on December 20, 2017. For the past few years, Wayne qualified as a dependent of the Deans. Federal income tax withheld is $4,200 (Lance) and $2,100 (Wanda). The proper amount of Social Security and Medicare tax was withheld. All members of the family were covered by health insurance for all of 2018. Required: Determine the 2018 Federal income tax 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 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 "O". 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. Form 1040 (2018) Lance H. and Wanda B. Dean 123-45-6786 Page 2 1 Wages, salaries, tips, etc. Attach Form(s) W-2 ........ 101,000 Tax-exempt interest b Taxable interest 1,500 3a 4a Attach Form(s) W- 2. Also attach Form(s) W-2G and 1099-R if tax was withheld. Qualified dividends Ordinary dividends IRAS, pensions, and b Taxable amount annuities Social security benefits 5a b Taxable amount Total income. Add lines 1 through 5. Add any amount from Schedule 1, line 22 102,500 X 5a 6 7 Adjusted gross income. If you have no adjustments to income, enter the amount from line 6; otherwise, subtract Schedule 1, line 36, from line 6............ 103,100 Standard deduction or itemized deductions (from Schedule A) ......... Standard de 24,000 Qualified business income deduction (see instructions) ........ Taxable income. Subtract lines 8 and 9 from line 7. If zero or less, enter-O-.... 79,100 x Standard 8 Deduction for- Single or married filing separately, 10 $12,000 Married filing jointly or Qualifying widow(er), $24,000 Head of 12 household, Te10 non a Tax (see inst) 2 X (check if any from: 10 Form(s) 8814 2 Form 4972 30 b Add any amount from Schedule 2 and check here ............... . a Child tax credit/credit for other dependents 1 x b Add any amount from Schedule 3 and check here ............... 13 Subtract line 12 from line 11. If zero or less, enter -0 - ....... . If you checked any box under Standard deduction, see instructions. Other taxes. Attach Schedule 4 15 Total tax. Add lines 13 and 14 ......... ............... ........ 16 Federal income tax withheld from Forms W-2 and 1099 ........ 17 Refundable credits: a EIC (see inst.) b Sch 8812 c Form 8863 Add any amount from Schedule 5 18 Add lines 16 and 17. These are your total payments ......... Refund 19 If line 18 is more than line 15, subtract line 15 from line 18. This is the amount you overpaid.. 20a Amount of line 19 you want refunded to you. If Form 8888 is attached, check here ....... 20 Direct deposit? b Routing number c Type: Checking Savings See instructions. d Account number 21 Amount of line 19 you want applied to your 2019 estimated tax ........ 22 Amount you owe. Subtract line 18 from line 15. For details on how to pay, see instructions .................. . Amount 22 ..... Note: This problem is for the 2018 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 2018, the Deans recorded the following receipts. Salaries ($60,000 for Lance, $41,000 for Wanda) $101,000 Interest income- City of Albuquerque general purpose bonds Ford Motor Company bonds Ally Bank certificate of deposit $1,000 1,100 400 Child support payments from John Allen 2,500 7,200 26,000 90,000 Annual gifts from parents Settlement from Roadrunner Touring Company Lottery winnings Federal income tax refund (for tax year 2017) 600 400 Wanda previously married to John Allen. When they divorced in 2018, 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 support-the 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 to her $90,000 cash in settlement of the personal injuries she sustained. 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 to her $90,000 cash in settlement of the personal injuries she sustained. The Deans made the following 2018 expenditures. $7,200 $3,600 Medical expenses (not covered by insurance) Taxes- Property taxes on personal residence State of New Mexico income tax (includes amount withheld from wages during 2018) Interest on home mortgage 4,200 Gifts to charity 7,800 6,000 3,600 1,200 5,000 Life insurance premiums (policy on Lance's life) Contribution to traditional IRA (on Wanda's behalf) Traffic fines 300 500 Contribution to the reelection campaign fund of the mayor of Santa Fe 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 Dean household includes the following, for whom they provide more than half of the support. Social Security Number Birth Date 123-45-6786 12/16/1976 123-45-6787 Lance Dean (age 42) Wanda Dean (age 40) Penny Allen (age 19) Kyle Allen (age 17) Wayne Dean (age 75) 123-45-6788 08/08/1978 10/09/1999 05/03/2002 06/15/1943 123-45-6780 123-45-6785 Penny graduated from high school on May 9, 2018, and is undecided about college. This year, she earned $8,500 (placed in a savings account) playing a harp in the lobby of a local hotel. Wayne is Lance's widower father who died on December 20, 2017. For the past few years, Wayne qualified as a dependent of the Deans. Federal income tax withheld is $4,200 (Lance) and $2,100 (Wanda). The proper amount of Social Security and Medicare tax was withheld. All members of the family were covered by health insurance for all of 2018. Required: Determine the 2018 Federal income tax 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 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 "O". 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. Form 1040 (2018) Lance H. and Wanda B. Dean 123-45-6786 Page 2 1 Wages, salaries, tips, etc. Attach Form(s) W-2 ........ 101,000 Tax-exempt interest b Taxable interest 1,500 3a 4a Attach Form(s) W- 2. Also attach Form(s) W-2G and 1099-R if tax was withheld. Qualified dividends Ordinary dividends IRAS, pensions, and b Taxable amount annuities Social security benefits 5a b Taxable amount Total income. Add lines 1 through 5. Add any amount from Schedule 1, line 22 102,500 X 5a 6 7 Adjusted gross income. If you have no adjustments to income, enter the amount from line 6; otherwise, subtract Schedule 1, line 36, from line 6............ 103,100 Standard deduction or itemized deductions (from Schedule A) ......... Standard de 24,000 Qualified business income deduction (see instructions) ........ Taxable income. Subtract lines 8 and 9 from line 7. If zero or less, enter-O-.... 79,100 x Standard 8 Deduction for- Single or married filing separately, 10 $12,000 Married filing jointly or Qualifying widow(er), $24,000 Head of 12 household, Te10 non a Tax (see inst) 2 X (check if any from: 10 Form(s) 8814 2 Form 4972 30 b Add any amount from Schedule 2 and check here ............... . a Child tax credit/credit for other dependents 1 x b Add any amount from Schedule 3 and check here ............... 13 Subtract line 12 from line 11. If zero or less, enter -0 - ....... . If you checked any box under Standard deduction, see instructions. Other taxes. Attach Schedule 4 15 Total tax. Add lines 13 and 14 ......... ............... ........ 16 Federal income tax withheld from Forms W-2 and 1099 ........ 17 Refundable credits: a EIC (see inst.) b Sch 8812 c Form 8863 Add any amount from Schedule 5 18 Add lines 16 and 17. These are your total payments ......... Refund 19 If line 18 is more than line 15, subtract line 15 from line 18. This is the amount you overpaid.. 20a Amount of line 19 you want refunded to you. If Form 8888 is attached, check here ....... 20 Direct deposit? b Routing number c Type: Checking Savings See instructions. d Account number 21 Amount of line 19 you want applied to your 2019 estimated tax ........ 22 Amount you owe. Subtract line 18 from line 15. For details on how to pay, see instructions .................. . Amount 22