Alice and Bruce are planning some significant changes for 2023. They have provided you with the following information and ask you to project their taxable income and tax liability for 2023.

The Byrds will invest the $1,600,000 of life insurance proceeds in short-term certificates of deposit (i.e., CDs) and use the interest for living expenses during 2023. They expect to earn total interest of $32,000 on the CDs.

Bruce has been promoted to regional manager, and his salary for 2023 will be $88,000. He estimates that state income tax withheld will increase by $4,000 and the Social Security Tax withheld will be $5,456.

Alice, who has been diagnosed with a serious illness, will take a leave of absence from work during 2023, so she will not receive a salary or incur any work-related expenses during the year. The estimated cost for her medical treatment is $15,400, of which $6,400 will be reimbursed by their insurance company in 2023. Their medical insurance premiums will increase to $9,769. Property taxes on their residence are expected to increase to $5,100. The Byrds home mortgage interest expense and charitable contributions are expected to be unchanged from 2022.

John will graduate from college in December 2022 and will take a job in New York City in January 2023. His starting salary will be $46,000.

Assume that all of the information reported in 2022 will be the same in 2023 unless other information has been presented above.

Required:

1. Use Excel to create a worksheet which projects the Byrds 2023 Federal Income Tax Projection