Julien and Sarah are married, file a joint return, and have two children, Kaya and Christopher. Kaya just finished her third year at college and Christopher just finished his first year of graduate school (fifth year of college). Tuition and books for the past year were $1,800 for Kaya and $5,000 for Christopher. How much can Julien and Sarah claim in educational credits if their joint AGI was $126,000 for 2019?
What will be an ideal response?
$2,300.
Answer computed as follows:
| Description | Amount | Explanation | |||
| (1) | Kaya's qualifying expenses | $ | 1,800 | ||
| (2) | American opportunity credit before and after phase-out. | 1,800 | Kaya is eligible for the American opportunity credit since it is her third year of school. No phase-out because AGI is not greater than $160,000. | ||
| (3) | Christopher's qualifying expenses | 5,000 | Not eligible for American opportunity credit because it is the fifth year of postsecondary education. | ||
| (4) | Credit percentage | 20 | % | ||
| (5) | Lifetime learning credit before phase-out | 1,000 | (3) × (4) | ||
| (6) | Excess AGI over threshold | 10,000 | $126,000 - $116,000 | ||
| (7) | Excess as a percentage of phase-out range | 50 | % | (6) / 20,000 | |
| (8) | Amount of credit phased out | (500 | ) | (5) × (7) | |
| Total education credits | $ | 2,300 | (2) + (5) + (8) | ||
You might also like to view...
Refer to Figure 11.1. Suppose the exchange rate is $.70 per franc. Free-market forces would lead to a(n) ____ of the dollar against the franc and a(n) ____ in U.S. international competitiveness.
a. depreciation, improvement b. depreciation, worsening c. appreciation, improvement d. appreciation, worsening
What are the major advantages and disadvantages associated with print advertising media (newspapers and magazines)?
What will be an ideal response?
The goal of behavioral questions asked during an interview is to challenge you to provide real evidence of your skills
Indicate whether the statement is true or false
A supervisor in a romantic relationship with a subordinate becomes immediately vulnerable to a sexual harassment claim.
Answer the following statement true (T) or false (F)