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Comprehensive Problem 6-63 (LO 6-1, LO 6-2, LO 6-3) (Algo)

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[The following information applies to the questions displayed below.] Joe and Jessie are married and have one dependent child, Lizzie. Lizzie is currently in college at State University. Joe works as a design engineer for a manufacturing firm while Jessie runs a craft business from their home. Jessies craft business consists of making craft items for sale at craft shows that are held periodically at various locations. Jessie spends considerable time and effort on her craft business, and it has been consistently profitable over the years. Joe and Jessie own a home and pay interest on their home loan (balance of $220,000) and a personal loan to pay for Lizzies college expenses (balance of $35,000). Neither Joe nor Jessie is blind or over age 65, and they plan to file as married-joint. Assume that the employer portion of the self-employment tax on Jessies income is $852. Joe and Jessie have summarized the income and expenses they expect to report this year as follows:

Income:
Joes salary	$ 131,200
Jessies craft sales	18,610
Interest from certificate of deposit	1,860
Interest from Treasury bond funds	758
Interest from municipal bond funds	962
Expenditures:
Federal income tax withheld from Joes wages	$ 13,700
State income tax withheld from Joes wages	6,820
Social Security tax withheld from Joes wages	7,566
Real estate taxes on residence	6,620
Automobile licenses (based on weight)	352
State sales tax paid	1,360
Home mortgage interest	18,100
Interest on Masterdebt credit card	2,720
Medical expenses (unreimbursed)	1,900
Joes employee expenses (unreimbursed)	2,820
Cost of Jessies craft supplies	6,570
Postage for mailing crafts	166
Travel and lodging for craft shows	2,440
Self-employment tax on Jessies craft income	1,704
College tuition paid for Lizzie	6,200
Interest on loans to pay Lizzies tuition	3,620
Lizzies room and board at college	13,040
Cash contributions to the Red Cross	630

Comprehensive Problem 6-63 Part-a (Algo)

a. Determine Joe and Jessies AGI and taxable income for the year. (Round your intermediate calculations to the nearest whole dollar amount.)

Joe and Jessies AGI
Joe and Jessies Taxable income