Line 1 is $3,250 (Bill and Kathy's deductible expenses). Line 2 is $50,000 (their AGI). Line 3 is $3,750 (50,000 X 0.075). Line 4=$0 ($3,250-$3,750). Did you complete lines 1 through 4 as shown?
Line 1: $3,250
Line 2: $50,000
Line 3: $4,000
Line 4: $0