Sandy and John Ferguson got married eight years ago and have a seven-year-old daughter, Samantha. In 2023, Sandy worked as a computer technician at a local university earning a salary of $152,800, and John worked part time as a receptionist for a law firm, earning a salary of $29,800. Sandy also does some Web design work on the side and reported revenues of $4,800 and associated expenses of $1,250. The Fergusons received $960 in qualified dividends and a $240 refund of their state income taxes. The Fergusons always itemize their deductions, get the full benefit of deducting the entire amount of state income taxes paid, and their itemized deductions were well over the standard deduction amount last year. Use Exhibit 8-10, Tax Rate Schedule, Dividends and Capital Gains Tax Rates, 2023 AMT exemption for reference.

The Fergusons reported making the following payments during the year:

• State income taxes of $4,600. Federal tax withholding of $21,000.
• Alimony payments to Sandy's former spouse of $10,400 (divorced 12/31/2014).
• Child support payments for Sandy's child with her former spouse of $4,180.
• $12,280 of real property taxes.
• John was reimbursed $640 for employee business expenses he incurred. He was required to provide documentation for the expenses to his employer.
• $3,600 to Kid Care day care center for Samantha's care while Sandy and John worked.
• $14,800 interest on their home mortgage ($400,000 acquisition debt).
• $3,120 interest on a $41,600 home-equity loan. They used the loan to pay for a family vacation and new car.
• $15,400 cash charitable contributions to qualified charities.
• Donation of used furniture to Goodwill. The furniture had a fair market value of $480 and cost $2,400.

Find:

(1) Gross income

(2) For AGI deductions

(3) Adjusted gross income

(4) Standard deduction

(5) Itemized deductions

(6) Greater of standard or itemized deducts

(7) Deduction for qualified business income

(8) Taxable income

(9) Income tax liability

[formula calculates tax on ordinary income ONLY]

(10) Other Taxes

S/E tax, AMT, NIIT, Addl Medicare tax, etc.

(11) Total Tax

(12) Credits

Child tax credit, Dependent care, AOTC, etc.

(13) Prepayments

Wages

Interest Income Tax-exempt Int.

Dividend Income Qualified Div.

State Tax Refund

Alimony Received (pre-2019 decree)

Business Income or (Loss)

Capital Gain (Losses)

Other Gains (Losses)

IRA Distributions

Pensions and Annuities

Social Security Benefits

Rental Income or (Loss)

Royalties

Flow-Through Entities (partnerships, S corps, trusts)

Farm Income or (Loss)

Unemployment Compensation

Other Income

TOTAL GROSS INCOME

FOR AGI (Above-the-Line) DEDUCTIONS

IRA Deduction

Self-Employed Health Insurance Deduction

Self-employed SEP, SIMPLE, and Qual. Plans

One-Half of Self-Employment Tax

Penalty on Early Withdrawal of Savings

Other "For AGI" Deductions

Alimony Paid (pre-2019 decree)

TOTAL FOR AGI DEDUCTIONS

ITEMIZED DEDUCTIONS (Below-the-Line)

Medical

State and Local Property Taxes

State Income Tax

State Sales Tax

Home Mortgage Interest

Investment Interest

Contributions - Cash

Contributions - Non-Cash

Casualty and Theft Losses

Other Itemized Deductions

0