Question

In 2019, Laureen is currently single. She paid $2,400 of qualified tuition and related expenses for each of her twin daughters Sheri and Meri to attend State University as freshmen ($2,400 each for a total of $4,800). Sheri and Meri qualify as Laureen's dependents. Laureen also paid $1,750 for her son Ryan's (also Laureen's dependent) tuition and related expenses to attend his junior year at State University. Finally, Laureen paid $1,250 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? (Leave no answer blank. Enter zero if applicable.) a. Laureen's AGI is $45,000 American opportunity tax credit: Lifetime Learning credit: b. Laureen's AGI is $95,000.

Answer 1

Part A

American opportunity credit: $5950

Lifetime Learning Credit: $250

Laureen’s Education Credits

Description	Amount	Explanation
(1) AOC before phase-out for Sheri and Meri	4200	[($2,000 × 100%) + ($400 × 25%)] × 2 students
(2) AOC before phase-out for Ryan	1750	$1930 x 100%
(3) Total AOC credit before phase-out	5950	(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	10000	$90,000 – 80,000
(8) Phase-out percentage	0%	(6) / (7)
(9) Phase-out amount	0	(3) × (8)
(10) Total AOC after phase-out	5950	(3) – (9)
(11) Lifetime learning credit before phase-out	250	$1,250 × 20%
(12) AGI	45000
(13) Phase-out threshold	57000
(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	10000	$67,000 – 57,000
(16) Phase-out percentage	0%	(14) / (15)
(17) Phase-out amount	0	(16) × (11)
(18) Lifetime learning credit after phase-out	250	(11) – (17)
Total education credits	6200	(10) + (18)

Part B

American opportunity credit: $0

Lifetime Learning Credit: $0

Laureen’s Education Credits

Description	Amount	Explanation
(1) AOC before phase-out for Sheri and Meri	4200	[($2,000 × 100%) + ($400 × 25%)] × 2 students
(2) AOC before phase-out for Ryan	1750	$1930 x 100%
(3) Total AOC credit before phase-out	5950	(1) + (2)
(4) AGI	$95000
(5) Phase-out threshold	80000
(6) Excess AGI	10000	(4) – (5) {but not <0 and limited to a maximum of $10,000}
(7) Phase-out range for single taxpayer	10000	$90,000 – 80,000
(8) Phase-out percentage	100%	(6) / (7)
(9) Phase-out amount	5950	(3) × (8)
(10) Total AOC after phase-out	0	(3) – (9)
(11) Lifetime learning credit before phase-out	250	$1,250 × 20%
(12) AGI	95000
(13) Phase-out threshold	57000
(14) Excess AGI	10000	(12) – (13) {but not <0 and limited to a maximum of $10,000}
(15) Phase-out range for taxpayer filing as Single	10000	$67,000 – 57,000
(16) Phase-out percentage	100%	(14) / (15)
(17) Phase-out amount	250	(16) × (11)
(18) Lifetime learning credit after phase-out	0	(11) – (17)
Total education credits	0	(10) + (18)