Required information Comprehensive Problem 6-63 (LO 6-1, LO 6-2, LO 6-3) (Algo) (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. Jessie's 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 Lizzie's 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 Jessie's income is $846. Joe and Jessie have summarized the income and expenses they expect to report this year as follows: $ 130,600 18,550 1,800 746 950 Income: Joe's salary Jessie's craft sales Interest from certificate of deposit Interest fron Treasury bond funds Interest from municipal bond funds Expenditures: Federal income tax withheld from Joe's wages State income tax withheld from Joe's wages Social Security tax withheld from Joe's wages Real estate taxes on residence Automobile licenses (based on weight) State sales tax paid Home mortgage interest Interest on Masterdebt credit card Medical expenses (unreimbursed) Joe's employee expenses (unreimbursed) Cost of Jessie's craft supplies Post for mailing crafts Travel and lodging for craft shows Self-employment tax on Jessie's craft income College tuition paid for Lizzie Interest on loans to pay Lizzie's tuition Lizzie's room and board at college Cash contributions to the Red Cross $ 13,700 6,700 7,542 6,500 340 1,300 17,500 2,600 1,840 2,700 5,910 160 2,380 1,692 6,080 3, see 12,920 600 | a. Determine Joe and Jessie's AGI and taxable income for the year. (Round your intermediate calculations to the nearest whole dollar amount.) Joe and Jessie's AGI Joe and Jessie's Taxable income lection Campaign Required information City, town, or post office. If you have a foreign address also completespaces below Sune code Check here if you, or your spouse ing jointly, want 53 to go to this und Chang a box below will not change your tax or refund Foreign country name Foreign province county Foreign postal code You Spouse At any time during 2020, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency? ON Standard Someone can You as a dependent Your spouse as a dependent Deduction Spouse ees on teretur or you were use Age Blindness were bom before Juny 2.1956 Are band Spouse Was bombefore January 21955 is bend Dependents De instructions 2) Social security number 3) Rationship to you (4) of qualities for see instructions (1) First name Last name Child taxe Come pendents 1 more than tour O dependents see instructions and check O O 1 Wages are set Achom-2 1 Asch Sch Bit 2a Tempere 2 required sa ne vienas Ordydd IRA distributions Table amount 10 sa Pensions and are 50 50 6a Social security benefits 6 Table amount 66 7 Capital gain or 1055) Altach Schedule of required. If not required. Check here 7 Standard 8 Other income from Schedule 1, line 8 Deduction for Single or Married Adne 1. 2. 3. 4. 5. 6. 7. 8. This is your income 9 ang sery $12.400 Mameding 10 Adjustments to income of Quality widowe a From Schedule 1, line 22 100 $24.000 Head of Charitable contributions you take the standard deduction See instructions 100 household $18650 Costines 109 and 10 These are your walaustments to income 100 you checked any box under 11 Subtract lines from inte 9 This is your use gross income 11 Deduction 12 Standard deduction or temized deductions (trom Schedule A) 12 See instructions 13 Qualified business income deduction Attach Form 8995 or Form 8996-A 13 14 Add lines 12 and 13 14 15 Table income Subtract line 54 om 11. Ir ressenter 15 For Disclosure. Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Cat No. 113200 Form 1040 (2020) THIS FORM IS A SIMULATION OF AN OFFICIAL U.S. TAX FORMITIS NOT THE OFFICIAL FORM ITSELF, DO NOT USE THIS FORM FOR TAX FILINGS FOR ANY PURPOSE OTHER THAN EDUCATIONAL, 2021 McGraw-Hill Education OMB No. 1545-0074 SCHEDULE 1 (Form 1040) Additional Income and Adjustments to Income 2020 Department of the Treasury Internal Revenue Service Name(s) shown on Form 1040 1040-SR, or 1040-NR Attach to Form 1040, 1040-SR, or 1040-NR. Go to www.irs.gov/Form 1040 for instructions and the latest information. Attachment Sequence No. 01 Your social security number Partl Additional Income Taxable refunds, credits, or offsets of state and local income taxes 1 2a 2a b 3 3 4 4 5 5 6 6 7 7 8 8 9 Part II 10 10 Alimony received Date of original divorce or separation agreement (see instructions) Business income or loss). Attach Schedule C Other gains or losses). Attach Form 4797 Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E Farm income or (loss). Attach Schedule F Unemployment compensation Other income. List type and amount Combine lines 1 through 8. Enter here and on Form 1040 1040-SR or 1040-NR, line 8 Adjustments to Income Educator expenses Certain business expenses of reservists, performing artists, and fee-basis government officials. Attach Form 2106 Health savings account deduction. Attach Form 8889 Moving expenses for members of the Armed Forces. Attach Form 3903 Deductible part of self-employment tax. Attach Schedule SE Self-employed SEP, SIMPLE, and qualified plans Self-employed health insurance deduction Penalty on early withdrawal of savings Alimony paid Recipient's SSN Date of original divorce or separation agreement (see instructions) IRA deduction 11 11 12 12 13 13 14 14 15 15 16 16 17 17 18a 18a b 19 19 20 Student loan interest deduction 20 21 Tuition and fees deduction. Attach Form 8917 21 22 Add lines 10 through 21. These are your adjustments to income. Enter here and on Form 1040 1040-SR, or 1040-NR, line 10a 22 For Paperwork Reduction Act Notice, see your tax return instructions. Cat. No. 71479F Schedule 1 (Form 1040)2020 THIS FORM IS A SIMULATION OF AN OFFICIAL U.S. TAX FORM. IT IS NOT THE OFFICIAL FORM ITSELF. DO NOT USE THIS FORM FOR TAX FILINGS OR FOR ANY PURPOSE OTHER THAN EDUCATIONAL. 2021 McGraw-Hill Education. Required information Comprehensive Problem 6-63 (LO 6-1, LO 6-2, LO 6-3) (Algo) (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. Jessie's 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 Lizzie's 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 Jessie's income is $846. Joe and Jessie have summarized the income and expenses they expect to report this year as follows: $ 130,600 18,550 1,800 746 950 Income: Joe's salary Jessie's craft sales Interest from certificate of deposit Interest fron Treasury bond funds Interest from municipal bond funds Expenditures: Federal income tax withheld from Joe's wages State income tax withheld from Joe's wages Social Security tax withheld from Joe's wages Real estate taxes on residence Automobile licenses (based on weight) State sales tax paid Home mortgage interest Interest on Masterdebt credit card Medical expenses (unreimbursed) Joe's employee expenses (unreimbursed) Cost of Jessie's craft supplies Post for mailing crafts Travel and lodging for craft shows Self-employment tax on Jessie's craft income College tuition paid for Lizzie Interest on loans to pay Lizzie's tuition Lizzie's room and board at college Cash contributions to the Red Cross $ 13,700 6,700 7,542 6,500 340 1,300 17,500 2,600 1,840 2,700 5,910 160 2,380 1,692 6,080 3, see 12,920 600 | a. Determine Joe and Jessie's AGI and taxable income for the year. (Round your intermediate calculations to the nearest whole dollar amount.) Joe and Jessie's AGI Joe and Jessie's Taxable income lection Campaign Required information City, town, or post office. If you have a foreign address also completespaces below Sune code Check here if you, or your spouse ing jointly, want 53 to go to this und Chang a box below will not change your tax or refund Foreign country name Foreign province county Foreign postal code You Spouse At any time during 2020, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency? ON Standard Someone can You as a dependent Your spouse as a dependent Deduction Spouse ees on teretur or you were use Age Blindness were bom before Juny 2.1956 Are band Spouse Was bombefore January 21955 is bend Dependents De instructions 2) Social security number 3) Rationship to you (4) of qualities for see instructions (1) First name Last name Child taxe Come pendents 1 more than tour O dependents see instructions and check O O 1 Wages are set Achom-2 1 Asch Sch Bit 2a Tempere 2 required sa ne vienas Ordydd IRA distributions Table amount 10 sa Pensions and are 50 50 6a Social security benefits 6 Table amount 66 7 Capital gain or 1055) Altach Schedule of required. If not required. Check here 7 Standard 8 Other income from Schedule 1, line 8 Deduction for Single or Married Adne 1. 2. 3. 4. 5. 6. 7. 8. This is your income 9 ang sery $12.400 Mameding 10 Adjustments to income of Quality widowe a From Schedule 1, line 22 100 $24.000 Head of Charitable contributions you take the standard deduction See instructions 100 household $18650 Costines 109 and 10 These are your walaustments to income 100 you checked any box under 11 Subtract lines from inte 9 This is your use gross income 11 Deduction 12 Standard deduction or temized deductions (trom Schedule A) 12 See instructions 13 Qualified business income deduction Attach Form 8995 or Form 8996-A 13 14 Add lines 12 and 13 14 15 Table income Subtract line 54 om 11. Ir ressenter 15 For Disclosure. Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Cat No. 113200 Form 1040 (2020) THIS FORM IS A SIMULATION OF AN OFFICIAL U.S. TAX FORMITIS NOT THE OFFICIAL FORM ITSELF, DO NOT USE THIS FORM FOR TAX FILINGS FOR ANY PURPOSE OTHER THAN EDUCATIONAL, 2021 McGraw-Hill Education OMB No. 1545-0074 SCHEDULE 1 (Form 1040) Additional Income and Adjustments to Income 2020 Department of the Treasury Internal Revenue Service Name(s) shown on Form 1040 1040-SR, or 1040-NR Attach to Form 1040, 1040-SR, or 1040-NR. Go to www.irs.gov/Form 1040 for instructions and the latest information. Attachment Sequence No. 01 Your social security number Partl Additional Income Taxable refunds, credits, or offsets of state and local income taxes 1 2a 2a b 3 3 4 4 5 5 6 6 7 7 8 8 9 Part II 10 10 Alimony received Date of original divorce or separation agreement (see instructions) Business income or loss). Attach Schedule C Other gains or losses). Attach Form 4797 Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E Farm income or (loss). Attach Schedule F Unemployment compensation Other income. List type and amount Combine lines 1 through 8. Enter here and on Form 1040 1040-SR or 1040-NR, line 8 Adjustments to Income Educator expenses Certain business expenses of reservists, performing artists, and fee-basis government officials. Attach Form 2106 Health savings account deduction. Attach Form 8889 Moving expenses for members of the Armed Forces. Attach Form 3903 Deductible part of self-employment tax. Attach Schedule SE Self-employed SEP, SIMPLE, and qualified plans Self-employed health insurance deduction Penalty on early withdrawal of savings Alimony paid Recipient's SSN Date of original divorce or separation agreement (see instructions) IRA deduction 11 11 12 12 13 13 14 14 15 15 16 16 17 17 18a 18a b 19 19 20 Student loan interest deduction 20 21 Tuition and fees deduction. Attach Form 8917 21 22 Add lines 10 through 21. These are your adjustments to income. Enter here and on Form 1040 1040-SR, or 1040-NR, line 10a 22 For Paperwork Reduction Act Notice, see your tax return instructions. Cat. No. 71479F Schedule 1 (Form 1040)2020 THIS FORM IS A SIMULATION OF AN OFFICIAL U.S. TAX FORM. IT IS NOT THE OFFICIAL FORM ITSELF. DO NOT USE THIS FORM FOR TAX FILINGS OR FOR ANY PURPOSE OTHER THAN EDUCATIONAL. 2021 McGraw-Hill Education