Today's date is July 1. Larry and Lolita Ande, both age 44, are reviewing their tax

situation for the current year. They have been married for a number of years and have

one adult child. They file their own tax returns, and this is the first time they have had

questions about their tax situation. Table VI.3 summarizes their financial position for

tax purposes. Use this information to answer their tax questions.

Table VI.3

The Andes' Annual Tax Position

Tax Item

Amount

Larry's earnings

$50,000

Lolita's earnings

$43,000

Federal tax withholdings

$12,300

State income tax withholdings

$4,100

State and local sales taxes paid

$2,300

FICA withholdings

$6,273

Bank account interest*

$1,600

State tax refund from previous year

$900

Home mortgage interest paid

$5,300

Real estate taxes paid

$1,800

Charitable contributions

$4,000

Unreimbursed medical expenses

$800

Stock ownership: United Motor Company**

Current value: $4,000

1. What will be Ands's Gross Income?

2. Itemize Deduction?

3. Calculate taxable Income?