Required: Fill out form $8995,$ form $8960,$ Calculate MAGI $($Form $1040)$

Richard McCarthy $($born $2/14/1969$; Social Security number $100-10-9090)$ and Christine

McCarthy $($born $6/1/1971$; Social Security number $101-21-3434)$ have a $19-$year$-$old son Jack,

$($born $10/2/2004$; Social Security number $555-55-1212),$ who is a full$-$time student at the

University of Key West. The McCarthys also have a $12-$year$-$old daughter Justine, $($born

$12/09/2011$; Social Security number $444-23-1212),$ who lives with them. The McCarthys can

claim a $$2,000$ child tax credit for Justine and a $$500$ other dependent credit for Jack. Richard is

the CEO at a paper company. His $2023$ Form W$-2($see separate tab$)$

Christine is an optometrist and operates her own practice $("$The Eyes of March"$)$ in town as a

sole proprietor. The shop address is $1030$ Morgan Highway, Clarks Summit, PA $18411$ and the

business code is $621320.$ Christine keeps her books on the cash basis and her bookkeeper

provided the following information:

Christine paid her rent in $2023$ month$-$to$-$month, but paid $$24,000$ in December $2023$ for a $12-$month

lease on her office for all of $2024.$ One of Christine's customers is a large state prison that purchases

special eye glasses for the inmates that meet prison safety standards. Because the order is large,

Christine received a $$20,000$ advance payment in December $2023$ for glasses she delivered in January

The rent and advance payment are included in her financial figures above.

The McCarthys have a nanny$/$housekeeper whom they paid $$14,000$ during $2023.$ They did not withhold

income or FICA taxes. The McCarthys paid Pennsylvania state unemployment tax of $$380$ in $2023.$

Christine received a $2023$ Form $1099-$INT from the National Bank of Scranton that listed interest income

of $$23,500.$ Note that McCarthys reasonably allocate $$751$ to state income tax expense for purposes of

the net investment income tax. Christine's uncle that lives in Scotland dies in $2023$ and left her a

checking account at the Royal Bank of Glasgow with a balance of $18,000$ or about US $$21,170.$ The

account did not earn any interest. Christine reported the account on the FinCEN website. Richard

received a Form $1098-$E $($presented below$)$ reporting the student loan interest he paid.