Josh and Megan Reed are married and have two children under 13 years old that qualify as their dependents. Josh is a self-employed landscape…

Josh and Megan Reed are married and have two children under 13 years old that qualify as their dependents. Josh is a self-employed landscape architect. Josh earned $150,000 of revenue and incurred $107,535 of deductible business expenses. Josh paid $2,000 in health insurance premiums. Megan is a nurse earning a taxable salary of $34,800. They incur $5,000 of child care expenses during the year. During the year they receive $1,600 in reimbursements from their medical plan and report $2,200 of investment income (qualified dividends). The Reed’s gambling winnings for the year were $1,000. Additionally, Josh paid $6,000 in alimony and $12,000 in child support to his former spouse. Josh’s ex-wife claims the children on her return. They provide you with the following data:

Automobile insurance $1,450

Homeowners’ insurance 625

Life insurance 980

Disability insurance (loss of earnings) 375

Country club dues 1,800

Hospital 3,500

Doctor 2,275

Chiropractor 650

Dentists 1,750

Prescription drugs 275

Cosmetic surgery (elective) 6,000

Over-the-counter drugs 460

Federal taxes withheld 7,500

State taxes withheld 3,745

Property taxes 320

Investment interest 1,600

Mortgage interest (primary residence) 6,850

Real estate taxes (primary residence) 2,240

Charitable contribution (cash) 8,435

Charitable contribution (clothes @ FMV) 100

Investment advice 425

Subscriptions to investment journals 225

Dues to professional organizations (Megan) 375

Attorney fee for tax advice on Dispute with IRS 525

Safe-deposit box 75

Tax return preparation 400

Gambling losses 1,650

Union dues 310

Nurse’s uniform 225

Please calculate AGI, taxable income, tax liability, any applicable credits, and tax due or refund amount for 2015 using the individual income tax format. Do not calculate AMT.