What is gross income

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. For the first two months of this year, Joe worked as an employee for his previous employer. In Mardh, Joe accepted a new job where he worked for the remainder of the year. Jessie runs a craft business from their home but does not have a room in the home set aside exclusively for her business. Jessie's craft business consists of making craft items for sale at craft shows that are at various locations. Jessie spends considerable time and effort on her craft business and it has been consistently profitable over the years and Jessie pay interest on a personal loan to pay for Lizzie's college expenses (balance of $35,000) Determine Joe and Jessie's AGI (show explained details of your work on the back of this page or attached complete page 1 of Form 1040. Assume that the 2016 rules apply for purposes of the qualified education on a separate sheet of paper) and expenses deduction and the employer ployment tax on Jessie's income is $640. Joe and Jessie have summarized their income and expenses for the year as follows