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 pay interest on a personal loan to pay for Lizzie’s college expenses (balance of $35,000). 

Based on their estimates, determine Joe and Jessie’s AGI and complete page 1 of Form 1040. Assume that the employer portion of the self-employment tax on Jessie’s income is $831. Joe and Jessie have summarized the income and expenses they expect to report this year as follows:
Income:
Joe’s salary......................................................................$124,100
Jessie’s craft sales..........................................................18,400
Interest from certificate of deposit.............................1,650
Interest from Treasury bond funds............................716
Interest from municipal bond funds..........................920
Income from renting out their personal
residence for 10 days during local golf
tournament...................................................................800
Expenditures:
Social Security tax withheld from Joe’s wages .........7,482
Cost of Jessie’s craft supplies......................................4,260
Postage for mailing crafts...........................................145

Travel and lodging for craft shows............................2,230
Self-employment tax on Jessie’s craft income.........1,662
College tuition paid for Lizzie.....................................5,780
Interest on loans to pay Lizzie’s tuition.....................3,200
Lizzie’s room and board at college............................12,620
Cleaning fees and advertising expense
associated with renting their residence
during local golf tournament.......................................600