Ask Question
30 December, 03:34

DJ and Gwen paid $3,200 in qualifying expenses for their son, Nikko, who is a freshman attending the University of Colorado. DJ and Gwen have AGI of $170,000 and file a joint return. What is their allowable American opportunity tax credit (AOTC) after the credit phaseout based on AGI is taken into account?

+1
Answers (1)
  1. 30 December, 04:31
    0
    The American Opportunity Tax Credit (AOTC) refers to a tax credit for qualified education expenses for a student for the first four years of post-secondary education for American taxpayers.

    The credit repays you 100% of the first $2,000 of qualified education expenses for each eligible student.

    The credit also repays 25% of the next $2,000 of qualified education expenses ($500).

    Since the total qualified education = $3200

    = ($2,000 * 100/100) + [ ($3,200 - $2,000) * 0.25]

    = $2000 + ($1200 * 25/100)

    = $2300

    Supposed credit = $2,300

    The modified annual gross income, MAGI requirements for a married couple filing jointly is $160000 < x < $180000

    Since Dj and gwen have AGI of $170000 and they file jointly, they get partial credit:

    = $2,300 * 1/2

    = $1,150.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “DJ and Gwen paid $3,200 in qualifying expenses for their son, Nikko, who is a freshman attending the University of Colorado. DJ and Gwen ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers