Question

federal income tax question

Question 4 of 12. filed line 4c. Jane is a full-time student who anticipates receiving a $2,500 American Opportunity Tax Credit in 2019. Not looking for a huge tax refund, how should Jane treat the credit when completing her 2020 Form W-4? Jane should add an estimate of the expected annual credit amount in Step 3 of her 2020 Form W.-4. This will decrease the amount of her withholding per pay period and reduce the amount of any tax refund that would be received when the return is O Jane is a full-time student. Full-time students are automatically exempt from federal income tax withholding. No entry related to the amount of the credit is necessary on the 2020 Form W-4. She should complete Steps 1 and 5, and write "exempt" beneath The American Opportunity Tax Credit is not taken into account in determining withholding. The only credits considered for this purpose are the Child Tax Credit and the Credit for Other Dependents. These credits would be included in Step 3 of the O Jane should use Step 4. Other Adjustments, on the 2020 Form W-4 and enter the credit as a negative amount on line 4a, Other income not from jobs. Reducing her taxable income in this way will be virtually the same as applying the credit to her taxable income Mark for follow up 2020 Form W.4 « Back Save / Return Later Summary Next >>

Answer 1

THE ANSWER WOULD BE OPTION D
jane should use step 4, other adjustments, on the 2020 form W-4, and enter the credit as negative amount on line 4a, other income not from jobs, reducing her taxable income in this way will be virtually the same as applying the credit to her taxabke income.