Reference no: EM13594775

1. A and B are married are both age 50, and have two dependent children, C aged 18, and D, aged 20, and live in Pittsburgh, California.

A has a sole proprietorship and B is an employee for two other companies.

C had $ 1,500 of interest income and D had $ 5,000 of wages income. C is in high school, and D is a full time student at SF State. D lives with A and B when not in school.

A's business had services income (cash receipts) of $ 95,000

Along with expenses of: rent $ 10,700, supplies $ 5,200, insurance $ 15,000, and interest on a business loan of $ 3,900. All of these amounts were paid during the year, and the expenses related to months of this year, 2013, except for the supplies which were used up early in the next year.

B's wages from job 1 were $ 40,000 with federal income tax withholding of $ 4,500, FICA withholding of $ 3,060 and state income tax withholding of $ 2,500, and, from job 2, wages of $20,000 and FICA withholding of $ 1,530.

B drives every Friday to job 1, 15 miles and back. On Monday through Thursday, B drives to job 1, then 25 miles to job 2, then 18 miles home from there. B worked 50 weeks during the year, and during 5 of those weeks, on the Friday, she went from job 1 to a client's business (a client of her job 1 employer) and then back to job 1, 16 miles round trip.

A had medical bills paid during the year as follows: doctor bills and hospital costs of $ 3,000, prescription drugs of $ 2,511, along with eyeglasses costing $ 95. A drove C 340 miles to Los Angeles in January 2013 to see a specialist (following C's Doctor's orders) and back and stayed overnight at a motel at a cost of $ 190.

A and B jointly own their home and paid mortgage interest of $ 5,500 during 2013, for the months of 2013 to the bank on a loan (average principal balance $ 112,000) incurred to buy the home, which is secured by the home. The home's property tax was paid on December 2012, in the amount of $1,700, and on December 2013 for $ 1,800. B owns a cabin near Mount Tamulpius in Marin County. B paid $2,550 in mortgage interest during 2013, for the months of 2013 on a loan (average principal balance $ 75,000) incurred to buy the cabin, secured by the cabin, and paid $ 840 property taxes on the cabin $ 280 on both 4-10-2013 and on 12-10-2013, and $ 280 on 4-10-2014.

B's cabin was broken into in December 2012, and some items were stolen. B became aware of the break in in January 2013, and estimates the value of the items lost are a television worth $600, a computer worth $ 3,000 and repair costs to the cabin of $ 1,500. The cabin (homeowners) insurance policy has a high deductible, and thus only $ 700 of insurance proceeds were received in April 2013 for the loss.

During 2013 B paid $ 550 of credit card interest to her bank and $ 1,400 interest on a loan she took out from the bank to buy the car she drives to work.

A paid estimated federal income taxes of $ 3,500 each quarter, and paid them when due. A paid $ 800 for last year's state income tax on April 15, 2013, along with four estimates for state income taxes of $ 1,200 each during 2013.

A bought a boat this year, which is moored in Tiburon, and paid $ 4,200 in sales taxes on the purchase on 8-19-2013. The registration for the boat, and for B's car, both paid in September of 2013, was $ 1790 ($ 600 based on value) boat, and $ 190 car.

On February 2, 2013, A made a contribution to a qualified charitable relief organization of $1,800. A also drove 500 miles to aid the charity in its work and provided services worth $ 1,200 to the charity as well.

B had union dues withheld from her job 1 wages during the year 2013 of $ 520, and paid an accountant $ 550 in April 2013, to write up her and A's returns from last year. B had taken trips to Las Vegas in May and July of 2013, to play Craps. In May she won $ 800, in July she lost $ 500.

During February 2013, a car A owned was stolen, and was never recovered. The car had been bought for $ 23,000 and was worth $ 17,000 when it was stolen. Insurance on the car theft of $4,000 was received from the insurer in April 2013.

A paid student loan interest on a qualified loan debt of $ 730 during 2013.What is A and B's 2013 federal tax refund or amount due?