Note: This problem is for the 2018 tax year.

Alfred E. Old and Beulah A. Crane, each age 42, married on September 7, 2016. Alfred and Beulah will file a joint return for 2018. Alfred's Social Security number is 111-11-1112. Beulah's Social Security number is 123-45-6789, and she adopted "Old" as her married name. They live at 211 Brickstone Drive, Atlanta, GA 30304.

Alfred was divorced from Sarah Old in March 2016. Under the divorce agreement, Alfred is to pay Sarah $1,250 per month for the next 10 years or until Sarah's death, whichever occurs first. Alfred pays Sarah $15,000 in 2018. In addition, in January 2018, Alfred pays Sarah $50,000, which is designated as being for her share of the marital property. Also, Alfred is responsible for all prior years' income taxes. Sarah's Social Security number is 123-45-6788.

Alfred's salary for 2018 is $150,000, and his employer, Cherry, Inc. (Federal I.D. No. 98-7654321), provides him with group term life insurance equal to twice his annual salary. His employer withheld $24,900 for Federal income taxes and $8,000 for state income taxes. The proper amounts were withheld for FICA taxes.

Beulah recently graduated from law school and is employed by Legal Aid Society, Inc. (Federal I.D. No. 11-1111111), as a public defender. She receives a salary of $42,000 in 2018. Her employer withheld $7,500 for Federal income taxes and $2,400 for state income taxes. The proper amounts were withheld for FICA taxes.

Beulah has $500 in qualified dividends on Yellow Corporation stock she inherited. Alfred and Beulah receive a $1,900 refund on their 2017 state income taxes. They itemized deductions on their 2017 Federal income tax return (total of $15,000). Alfred and Beulah pay $4,500 interest and $1,450 property taxes on their personal residence in 2018. Their charitable contributions total $2,400 (all to their church). They paid sales taxes of $1,400, for which they maintain the receipts. Both spouses had health insurance for all months of 2018 and do not want to contribute to the Presidential Election Campaign.

Required:

Compute Alfred and Beulah's net tax payable (or refund due) for 2018, on a joint return, by providing the following information that would be reported on Form 1040

• Enter all amounts as positive numbers.
• If is zero, enter "0".
• Make realistic assumptions about any missing data.
• If required round your final answers to the nearest dollar.

• Use the 2018 Tax Rate Schedules to compute the tax.

  Note: Because the tax rate schedules are used instead of the tax tables, the amount of tax computed may vary slightly from the amount listed in the tables. This variation occurs because the tax for a particular income range in the tax table is based on the midpoint amount.

  2018 Tax Rate Schedules
  SingleSchedule X											Head of householdSchedule Z
  If taxable income is: Over		But not over		The tax is:				of the amount over			If taxable income is: Over		But not over		The tax is:				of the amount over
  $0		$9,525		. . . . . .		10%		$0			$0		$13,600		. . . . . .		10%		$0
  9,525		38,700		$952.50	+	12%		9,525			13,600		51,800		$1,360.00	+	12%		13,600
  38,700		82,500		4,453.50	+	22%		38,700			51,800		82,500		5,944.00	+	22%		51,800
  82,500		157,500		14,089.50	+	24%		82,500			82,500		157,500		12,698.00	+	24%		82,500
  157,500		200,000		32,089.50	+	32%		157,500			157,500		200,000		30,698.00	+	32%		157,500
  200,000		500,000		45,689.50	+	35%		200,000			200,000		500,000		44,298.00	+	35%		200,000
  500,000		. . . . . .		150,689.50	+	37%		500,000			500,000		. . . . . .		149,298.00	+	37%		500,000
  Married filing jointly or Qualifying widow(er)Schedule Y-1											Married filing separatelySchedule Y-2
  If taxable income is: Over		But not over		The tax is:				of the amount over			If taxable income is: Over		But not over		The tax is:				of the amount over
  $0		$19,050		. . . . . .		10%		$0			$0		$9,525		. . . . . .		10%		$0
  19,050		77,400		$1,905.00	+	12%		19,050			9,525		38,700		$952.50	+	12%		9,525
  77,400		165,000		8,907.00	+	22%		77,400			38,700		82,500		4,453.50	+	22%		38,700
  165,000		315,000		28,179.00	+	24%		165,000			82,500		157,500		14,089.50	+	24%		82,500
  315,000		400,000		64,179.00	+	32%		315,000			157,500		200,000		32,089.50	+	32%		157,500
  400,000		600,000		91,379.00	+	35%		400,000			200,000		300,000		45,689.50	+	35%		200,000
  600,000		. . . . . .		161,379.00	+	37%		600,000			300,000		. . . . . .		80,689.50	+	37%		300,000

Instructions N Form 1040 Information 2. Calculate taxable gross income. Alt Th 3. Calculate the total adjustments for AGI. AI ye S4. Calculate adjusted gross income. Alt ins pr 5. Calculate the greater of the standard deduction or itemized deductions 6. Calculate total taxable income. 7. Calculate the income tax liability 8. Calculate the total tax credits available. Instructions Nd Form 1040 Information A 6. Calculate total taxable income. Sq $ Th Al ye $5 8. Calculate the total tax credits available. 7. Calculate the income tax liability All 9. Calculate total withholding and tax payments. in pr Be 10. Calculate the amount overpaid (refund): 11. Calculate the amount of taxes owed