Martin S. Albert (SS # 363-22-1141) is 39 Years old and is married to Michele R. Albert (SS# 259-05-8242). The Alberts live at 512 Ferry Road, Newport News, VA 23100. They file a joint return and have two dependent children ( Charlene, age 17, and Jordan, age 18) Charlene's SS3# is 260-12-1234, and Jordan's is 263-23-4321. In 2007, Martin and Michele had the following transactions.
a) Martin received $115,000 in salary from Red Steel Corporation, where he is a construction engineer. Whitholding for Federal income tax was $10,750. The amounts witheld for FICA tax were as follows: $6,622 (106,800 x 6.2%) for Social Security and $ 1,668 (115,000x 1.45%) for Medicare. Martin worked in Mexico from January 1, 2006 until Feb. 15 2007. His $108,000 salary for 2007 includes $16,000 he earned for January and one-half of February 2007 while working in Mexico.
b) Martin and Michele received $800 in dividends on Green, Inc. stock and $400 interst on Montgomery County (Virginia) school bonds.
c) Martin recieved $2300 interest from a Bahamian bank account.
d) Michele received 50 shares of Applegate Corporation common stock as a stock dividend. The shares had a fair market value of $2000 at the time Michele received them, and she did not have teh option of receiving cash.
e) Martin and Michele received a $900 refund on their 2006 Virginia income taxes. Their itemized deductions in 2006 totaled $12,500
f) Martin paid $6,000 alimony to his former wife, Rose T. Morgan ( ss # 262-55-4813)
g) Marin and Michele kept the receipts for their sales taxes paid of $1,100
h) Martin and Michele's itemized deductions were as follows:
-State income tax paid and withheld totaled $5,100
-Real estate taxes on their principle residence were $3,400
-Mortgage interest on their principle residence was $2,500
-Cash Contributions to the church totaled $2,800
what forms/ schedules need to be used?
what must be done to determine Martin's income from Mexico?