Question

In 2019, Laureen is currently single. She paid $2,340 of qualified tuition and related expenses for each of her twin daughters Sheri and Meri to attend State University as freshmen ($2,340 each for a total of $4,680). Sheri and Meri qualify as Laureen’s dependents. Laureen also paid $1,720 for her son Ryan’s (also Laureen’s dependent) tuition and related expenses to attend his junior year at State University. Finally, Laureen paid $1,220 for herself to attend seminars at a community college to help her improve her job skills.

What is the maximum amount of education credits Laureen can claim for these expenditures in each of the following alternative scenarios?

a. Laureen's AGI is $45,000.

American opportunity tax credit:

Lifetime learning credit:

Answer 1

SOLUTION:-

American opportunity credit: $ 5890

Lifetime Learning Credit: $244

Laureen's Education Credits

Description	Amount	Explanation
(1) AOC before phase - out for Sheri and Meri	4170	[($2,000*100%) + ($340*25%)] * 2 students
(2) AOC before phase-out for Ryan	1720	$1720*100%
(3) Total AOC credit before phase-out	5890	(1) + (2)
(4) AGI	$45000
(5) Phase-out threshold	80000
(6) Excess AGI	0	(4) - (5) {but not <0 and limited to a maximum of $10,000}
(7) Phase-out range for single taxpayer	10,000	$90,000 - 80,000
(8) Phase-out percentage	0%	(6) / (7)
(9) Phase-out amount	0	(3) * (8)
(10) Total AOC after phase-out	5890	(3) - (9)
(11) Lifetime learning credit before phase-out	244	$1,220 * 20%
(12) AGI	45,000
(13) Phase-out threshold	54,000
(14) Excess AGI	0	(12) - (13) {but not <0 and limited to a maximum of $10,000}
(15) Phase-out range for taxpayer filing as Single	10,000	$64,000 - 54,000
(16) Phase-out percentage	0%	(14) / (15)
(17) Phase-out amount	0	(16) * (11)
(18) Lifetime learning credit after phase-out	244	(11) - (17)
Total education credits	6134	(10) + (18)

THANK YOU , if any queries please leave your valuable comment on comment box........