Problem 1: (80 pts)

Walt and Carol Fish are married and file a joint tax return. Walt (2/19/1969) is employed as a salesperson for One Way Boat Company and Carol (3/1/1970) is employed by SC Company as a marketing executive.They have two children, Don and Dominique.They currently live in Sauk City, WI, in a home they had built in May of 2015. Their address is 608 Boat Street, Sauk City, WI, 53583. Don (111-11-1115) was born on 2/1/2000 and Dominique (111-11-1116) was born on 3/3/2003.

The Fish's had the following W-2 information from their records for 2020:

Walt Fish111-11-1112

Wages (box 1)$79,355

Federal tax withheld (box 2)10,000

Social security wages (box 3)79,355

Social Security tax withheld (box 4)4,920

Medicare wages (box 5)79,355

Medicare tax withheld(box 6)1,151

State wages (box 16)79,355

State income tax withheld (box 17)4,500

Carol Fish111-11-1113

Wages (box 1)$69,000

Federal tax withheld (box 2)8,000

Social security wages (box 3)69,000

Social Security tax withheld (box 4)4,278

Medicare wages (box 5)69,000

Medicare tax withheld(box 6)1,001

State wages (box 16)69,000

State income tax withheld (box 17)3,250

The Fish's received 1099 INT's with the following interest income:

US Treasury bill (box 3)$2,480

Bank of Monroe (box 1)4,900

Walt and Carol received 1099 DIV's from the following sources:

Vanguard Mutual Fund (box 2a)$1,850

IBM (box 1 and 1a)2,100

Janus Mutual Fund (box 2a)680