Richard Mccarthy (born 2/14/1965; Social Security number 100-10-9090) and Christine Mccarthy (born 6/1/1967; Social security number 101-21- 3434) have a 19-year-old son (born 10/2/2000 Social Security number 555-55-1212), Jack who is a full-time student at the University of Key West. The Mccarthys also have a 12-year-old daughter (Social Security number 444-23-1212), Justine, that lives with them. The Mccarthys can claim a $2,000 child tax credit for Justine and a $500 other dependent credit for Jack. Richard is the CEO at a paper company. His Form W-2 is provided. Christine is an optometrist and operates her own practice ("The Eyes of March") in town as a sole proprietor. The shop address is 1030 Morgan Highway, Clarks Summit, PA 18411 and the business code is 621320. Christine keeps her books on the accrual basis and her bookkeeper provided the following information: Gross sales $270,541 Returns 8,994 Inventory: Beginning inventory $24,000 Purchases 120,000 Ending inventory 30,000 Rent 24,000 Insurance 11,019 Professional fees 2,998 Payroll 37,113 Payroll taxes 2,877 Utilities 3,961 Office expenses 1,995 Depreciation 5,000 The Mccarthys have a nanny/housekeeper they paid $12,600 during 2019. They did not withhold income or FICA taxes. The Mccarthys paid Pennsylvania state unemployment tax of $378 in 2019. Christine received a 2019 Form 1099-INT from the National Bank of Scranton that listed interest income of $23,467. Note that Mccarthys reasonably allocate $761 to state income tax expense for purposes of the Net Investment Income tax. The Mccarthys received a Form 1099-G from Pennsylvania that reported a $451 state income tax refund from 2018. The Mccarthys itemized deductions in 2018 and had $14,223 of state income tax expense that was limited to $10,000