Question

In 2018, Elaine paid $2,840 of tuition and $800 for books for her dependent son to attend State University this past fall as a freshman. Elaine files a joint return with her husband. What is the maximum American opportunity credit that Elaine can claim for the tuition payment and books in each of the following alternative situations?

a. Elaine’s AGI is $103,500.

b. Elaine’s AGI is $172,000.

c. Elaine’s AGI is $200,500.

Answer 1

a) ELAINE AGI IS $ 103500

ELAINE MAY CLAIM AN AMERICAN OPPORTUNITY CREDIT (AOC ) OF $ 2350

DESCRIPTION AMOUNT EXPLANATION

1) AOC BEFORE PHASE OUT $ 2350 2000 X 100% +(3400-2000) X 25 %

2) AGI $ 103500   

3) PHASE OUT THRESHOLD 160000

4) EXCESS AGI $ 0 (2) -(3) ( BUT NOT < 0AND LIMITED TO A

MAXIMUM OF $ 20000)

5) PHASE OUT RANGE

FOR TAXPAYER FILLING

AS MARRIED FILLING JOINTLY $ 20000 $ 180000-160000

6) PHASE OUT PERCENTAGE 0% (4) / (5) OR 100 % MAX

7) PHASE OUT AMOUNT $ 0 (1) X (6)

AOC AFTER PHASE OUT $ 2350 (1) -(7)

B) ELAINE AGI IS $ 172000

ELAINE MAY CLAIM AN AMERICAN OPPORTUNITY CREDIT (AOC ) OF $ 940

DESCRIPTION AMOUNT EXPLANATION

1) AOC BEFORE PHASE OUT $ 2350 2000 X 100% +(3400-2000) X 25 %

2) AGI $ 172000

3) PHASE OUT THRESHOLD 160000

4) EXCESS AGI $ 12000 (2) -(3) ( BUT NOT < 0AND LIMITED TO A

MAXIMUM OF $ 20000)

5) PHASE OUT RANGE

FOR TAXPAYER FILLING

AS MARRIED FILLING JOINTLY $ 20000 $ 180000-160000

6) PHASE OUT PERCENTAGE 60% (4) / (5) OR 100 % MAX

7) PHASE OUT AMOUNT $ 1410 (1) X (6)

AOC AFTER PHASE OUT $ 940 (1) -(7)