James and Esther Johnson live at 45678 S.W. 112th Street, Homestead, FL 33033. James, who is 67 years old (date of birth 12/14/1951), is retired receiving social security benefits and Esther, who is 66 years old (date of birth 06/11/1952), is also retired but working on a part-time basis. Their social security numbers are 412-34-5670 and 412-34-5671, respectively. The Johnsons had qualifying health care coverage at all times during the tax year. Annual social security income for Jim is $22,000 (SSA-1099, box 5) and for Esther is $10,800 (SSA-1099, box 5). Interest received by them from Central Bank is $2,545 (1099-INT, box 1). No income tax withholding was made. Esther is working part-time as an interior decorator as an employee of Decorating House, a corporation. Her form W-2 shows the following information:

Wages	=	$	15,000.00
Federal W/H	=	$	1,500.00
Social security wages	=	$	15,000.00
Social security W/H	=	$	930.00
Medicare wages	=	$	15,000.00
Medicare W/H	=	$	217.50

Their itemized deductions are as follows:

1. Mortgage interest on their main home, $10,500.
2. Real estate taxes, $5,600.
3. Personal property taxes, $185.
4. Doctors' expenses unreimbursed by insurance, $7,400.
5. Medical insurance premiums for the year, $2,400.
6. Prescribed medicine, $1,995.
7. Vitamins, $300.
8. Total cash contributions to their church, $675. The contributions were made over the course of the year and no individual contribution was greater than $250.
9. Tax preparation fees for their 2017 return, $325, paid in 2018.
10. Lottery tickets bought by Esther during the year, $750. Winnings received, $940 (W-2G, box 1). Income tax withholding on winnings, $35 (W-2G, box 4).

Because the Johnsons live in Florida, where there is no state income tax, they will deduct the estimation of the general sales tax related to the area in which they live. The most efficient way to do this is by using the Sales Tax Calculator on the IRS website at https://www.irs.gov/Individuals/Sales-Tax-Deduction-Calculator. A key point to remember in using the calculator is that income for this calculation also includes the nontaxable portion of social security benefits. Prepare their individual income tax return using the appropriate forms. They do not want to contribute to the presidential election campaign and do not want anyone to be a third-party designee. For any missing information, make reasonable assumptions. They had qualifying health coverage at all times during the year. (List the names of the taxpayers and any income they receive in the order in which they appear in the problem. Input all the values as positive numbers unless otherwise stated in the forms. Instructions can be found on certain cells within the forms. Round your final answers to the nearest whole dollar amount.)

Use the appropriate Tax Tables.

SCHEDULE 1 Additional Income and Adjustments to Income OMB No. 1545-0074 (Form 1040) 2018 Department of the Treasury Attach to Form 1040. Internal Revenue Service Go to www.irs.gov/Form1040 for instructions and the latest information. Attachment Sequence No. 01 Name(s) shown on Form 1040 Your social security number Additional 19 b Reserved 1-9b Income 10 Taxable refunds, credits, or offsets of state and local income taxes 10 11 Alimony received 11 12 Business income or (loss). Attach Schedule C or C-EZ 12 13 Capital gain or (loss). Attach Schedule D if required. If not required, check here checkbox unchecked1 of 1 13 14 Other gains or (losses). Attach Form 4797 14 15a Reserved 15b 16a Reserved 16b 17 Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E 17 18 Farm income or (loss). Attach Schedule F 18 19 Unemployment compensation 19 20a Reserved 20b 21 Other income. List type and amount 21 22 Combine the amounts in the far right column. If you dont have any adjustments to income, enter here and on Form 1040, line 6. Otherwise, go to line 23 22 Adjustments 23 Educator expenses 23 to Income 24 Certain business expenses of reservists, performing artists, and fee-basis government officials. Attach Form 2106 24 25 Health savings account deduction. Attach Form 8889 25 26 Moving expenses for members of the armed forces. Attach Form 3903 26 27 Deductible part of self-employment tax. Attach Schedule SE 27 28 Self-employed SEP, SIMPLE, and qualified plans 28 29 Self-employed health insurance deduction 29 30 Penalty on early withdrawal of savings 30 31a Alimony paid b Recipients SSN 31a 32 IRA deduction 32 33 Student loan interest deduction 33 34 Reserved 34 35 Reserved 35 36 Add lines 23 through 35