Question

Hugo’s daughter, Wanda, completed her senior year of college in the current year. Hugo paid $5,0000 in qualified education expenses for Wanda in the current year. Hugo is a MFJ taxpayer and has an AGI of $60,000 for the current year. What, if any, education credit will provide Hugo the highest credit and how much is that credit?

Answer 1

I will give you the clear information about the education credit

you can find the answer from the below information

Unlike the other education tax credits, the AOTC is allowed for expenses for course-related books, supplies and equipment that are not necessarily paid to the educational institution but are needed for attendance. It also differs because you can claim the credit for four tax years instead of no limit on the number of years you can claim the Lifetime Learning Credit.

It is a tax credit of up to $2,500 of the cost of tuition, certain required fees and course materials needed for the attendance and paid during the tax year. Also, 40 percent of the credit for which you qualify that is more than the tax you owe (up to $1,000) can be refunded to you.

In general, qualified tuition and related expenses for the education tax credits include tuition and required fees for the enrollment or attendance at eligible post-secondary educational institutions (including colleges, universities and trade schools). The expenses paid during the tax year must be for: an academic period that begins in the same tax year or an academic period that begins in the first three months of the following tax year.

The following expenses do not qualify for the AOTC or the LLC:

• Room and board
• Transportation
• Insurance
• Medical expenses
• Student fees, unless required as a condition of enrollment or attendance
• Same expenses paid with tax-free educational assistance
• Same expenses used for any other tax deduction, credit or educational benefit

I think now you arae able to find the answer for your question