Final answer:
The filing status, dependents, and use of standard/itemized deduction depend on the individual's marital status, dependents, and specific deductions. The taxable income can be calculated by subtracting deductions and exemptions from the adjusted gross income. However, without more information about Judy and Walter's income and personal situation, it is not possible to provide specific computations or suggestions for their tax return.
Step-by-step explanation:
The filing status for Judy and Walter was not provided in the question, so we can't determine it specifically. However, there are five filing statuses: single, married filing jointly, married filing separately, head of household, and qualifying widow(er) with dependent child. The choice of filing status depends on marital status and other factors. To determine the filing status, you would need more information about Judy and Walter's marital status and whether they have dependents.
To determine the taxable income, you would first calculate the adjusted gross income (AGI) by summing up all the income from different sources like wages, interest income, and unemployment compensation. Then, you would subtract the deductions and exemptions from the AGI to arrive at the taxable income. Deductions are specific expenses that can be subtracted from the AGI, like the standard deduction or itemized deductions. Exemptions, on the other hand, reduce the taxable income by a fixed amount for each person claimed as a dependent on the tax return. The final taxable income is then used to determine the tax owed based on the tax rate schedule for the given year.
Since the specific details of Judy and Walter's income, deductions, and exemptions were not provided, it is not possible to calculate their estimated taxable income or provide tax planning considerations. Without more information, it is also not possible to determine the filing status, dependents, and use of standard/itemized deduction for Judy and Walter.