Problem 10-37 (LO. 2, 3, 4, 5, 7, 8) Bart and Elizabeth Forrest are married and have no dependents. They have asked you to advise them whether they should file jointly or separately in 2020. Bart incurred some significant medical expenses during the year related to an unexpected surgery. They present you with the following information: Salary (Bart) Salary (Elizabeth) Interest income Deductions for AGI Medical expenses State income tax Real estate tax Mortgage interest Unreimbursed employee expenses Bart $38,000 Elizabeth Joint $110,000 400 1,200 $2,200 2,400 14,000 10,427 3,358 900 11,800 5,800 4,200 1,200 If they file separately, Bart and Elizabeth will split the real estate tax and mortgage interest deductions equally. If an amount is zero, enter "0". Do not round your intermediate tax computations but round your final tax answers to the nearest dollar. Round all other computations to the nearest dollar. Complete the comparison table through AGI, then compute the total amount of the itemized deductions on the separate schedule before completing the remainder of the table. Click here to access the 2020 tax rate schedule. Comparison of Joint and Separate Tax Liabilities Tax Year 2020 Salary (Bart) Salary (Elizabeth) Interest income Gross income Less: deductions for AGI AGI Medical expenses after 7.5%-of-AGI floor State income and real estate taxes Mortgage interest Total itemized deductions (MFS) or standard deduction (MFJ) Total deductions from AGI Taxable income Tax Savings from filing jointly: Tax filing separately Tax filing jointly Savings Bart Elizabeth Joint Complete the letter to Bart and Elizabeth. Maloney, Young, Nellen, & Persellin, CPA 5191 Natorp Boulevard Mason, OH 45040 January 23, 2021 Mr. and Mrs. Bart Forrest 2003 Highland Drive Durham, NC 27707 Dear Mr. and Mrs. Forrest: I have reviewed the tax information you provided and have determined that your Federal income taxes minimized by filing for 2020. A detailed computation that supports my conclusion is enclosed. Please let me know if you have any question or would like to discuss my recommendation in further detail. Thank you for consulting our firm on this matter. We look forward to serving you in the future. Sincerely, Richard Rodriguez, CPA Partner