Reba and Charlie, who are married filing jointly, have three children (ages 5, 9 and 17) who are dependents. They have a W-2 income of $90,000. They have $13,500 in Federal taxes withheld. Reba and Charlie have the following expenses for the year:

Interest on a home equity loan taken out in 2018 (loan issued for $100,000, used for secondary education)

$2,500

Interest on first mortgage (original loan balance $450,000)

$12,000

Property taxes on personal residence

$8,000

State income tax

$8,000

State sales tax

$4,500

What is Reba and Charlie's taxable income?

a.

$55,000.

b.

$57,500

c.

$62,000

d.

$65,600