Meals provided by Applebees while Harry was working: $$1,200$

Length of service award received by Suzy in a qualified plan: $$1,000$

Harry took a distribution from his company's retirement plan of $$20,000($See Exhibit Form $1099$R$).$ $$6,000$ was rolled over into another qualified

retirement plan, $$10,000$ was used towards a down payment on a home $($this is the first home that Harry and Sally have purchased$),$ and $$4,000$ was used

to pay off high interest rate credit cards.

Exhibits

W$-2$ Applebees$-$ $$48,750$ Wages $,$ Federal $$4,875,$ Social Security $$3,000$ tips $,$ Social Security Withheld $$3,023,$ Medical Tax Withheld $$707,$ Dependent Care $$2,000$ State Tax $$2,413$

W$-2$ Greenway$-$ $$98,000,$ Federal $$19,600$ SS Withheld $$6,067,$ Medical Withheld $$1,421,$ Dependent Care $$5,000,$ State tax $$4,851$

Form $1099$R

Enter the amount in the associated cells. Enter all values as positive numbers. If a value is zero, enter a zero $(0).$

Calculate the taxable portion for dependent care assistance

Calculate Harry and Sally's gross income

Calculate the premature distribution penalty