Price s. wrights and May B. Wright are married. Both are under age 65, and are not blind. Thye also have two qualifying child dependants. He presents the following information to you related to their 2017 taxes. Wages received $85,000 Social security benefits (in total) $22,000 Pass-through partnership income (loss) ($12,000) Punitive damages from personal injury lawsuit $18,000 Tuition and fees paid $2,500 Gifts received from an old friend $8,000 Proceeds from a new loan to expand their house $36,000 Annuity received $24,000 Contribution to traditional IRA $5,500.
For the annuity, they had originally invested $36,000 in 2009, and are to receive 160 monthly payments of $3,000 each. There are no limitations on the tuition and fees paid. Assuming they file as married jointly and use the standard deduction, what is Price S. Wright and May B. Wright’s 2017 tax owed? (Hint: you may want to address any issues related to social security benefits last).