Instructions: Need to do the requirement part in Excel. BASED ON US TAX ACCOUNTING./n Spring 2024 ACCTG 332 - Take Home Midterm It is now March 2024; the Reynolds family are working on their taxes for 2023. Below is their basic information: Emily Reynolds (45) works as an elementary school teacher at Mountain View Elementary School in San Diego, California. Her husband, Alex Reynolds (46), is employed as a commercial pilot for Soar High Airlines, also in San Diego. Emily and Alex reside in a recently purchased home in Del Mar area. The couple has two children who lived with them throughout the year. Olivia is 12, and Ethan (19) is now a full-time student at SDSU. Neither child provided more than half of their own support. Emily and Alex had the following transactions in 2023: 1. Alex's annual salary as a commercial pilot is $210,000. Emily's annual salary is $98,000. 2. In addition to their salaries, Alex and Emily have various investments and received the following income on their investments: $550 in interest from San Diego municipal bonds; $2,070 interest from mutual funds; $65 in interest from their joint savings account; $17,000 net long-term capital gain from various stocks they disposed. During 2023, their stock portfolio appreciated by $16,800, but they have not sold these stocks. 3. The Reynolds own a rental property. This year, they received $42,000 of rental payments from tenants and incurred $20,000 of expenses associated with the rental. 4. Early 2023, the Reynolds sold their previous residence for $1.4 million, which they bought 10 years ago for $800,000. The newly purchased home was bought at $2.2 million in 2023, with a mortgage of $750,000. In 2023, they paid total property tax of $26,000, and mortgage interest of $11,050. 5. Alex injured his arm on a family skiing trip and was unable to fly for three weeks. He received $9,000 for disability pay from his disability insurance policy. Soar High Airlines paid $1,200 in premiums on this policy during 2023. The disability insurance policy premiums are paid for by Soar High Airlines as a nontaxable fringe benefit to Alex. 6. In September, Emily was hit by a car while crossing the street near her school. The driver's insurance company paid her $2,800 for medical expenses relating to her injuries from the accident, $5,000 for emotional distress from the accident, and $20,000 as punitive damage. 7. Alex's father died in 2023. Alex received a $100,000 death benefit from his father's life insurance policy and inherited a property with a value of $30,000. Olivia and Ethan also each received $50,000 worth of stocks, generating dividend income of $3,800 for the year. 8. The Reynolds donated $30,000 cash to their local church. 9. In 2023, Emily enrolled in a community college to take a class on Advanced Classroom Management, and paid tuition of $1,200. 10. Olivia went to a summer camp and the tuition was $3,200. 11. The Reynolds paid a total state income tax of $22,000. 12. Alex had $36,750 of federal income tax withheld by his employer and Emily had $11,000. They did not make any estimated tax payments. Their tax liability last year was $35,800. Requirements: 1. Pease determine each of the family members filing status and filing requirements (whether or not they need to file) for 2023. (15 points) 2. Please use the income tax formula to determine the Reynolds's federal income taxes dues or taxes payable for the current year. Make sure that you list all items, such as different items of gross income, for AGI and from AGI deductions, tax credits, repayments etc. to receive full credits. For income excluded, you may also list with $0. For each of the items listed, consider show calculations for partial credits. (50 points) 3. Determine the amount of FICA taxes Emily and Alex are required to pay. (5 points) 4. What is the due date of the Reynolds' tax return, if they plan not to request an extension? (5 points) 5. Would the Reynolds be subject to underpayment penalty and what is the amount, if any? Assume the federal short-term rate is 5 percent. (10 points) 6. What do they need to do to avoid the underpayment penalty? (5 points) 7. Are Olivia and Ethan subject to Kiddie tax? Why or why not? Are there any ways for them to avoid Kiddie tax? Explain. (10 points) Please show all your work in Excel worksheet.