11 Education Tax Credit Obi 2 In 2016 Paul and Karen Mitchel

11. Education Tax Credit. (Obi. 2) In 2016, Paul and Karen Mitchell pay $12,000 for their daughter\'s tuition for the Spring and Fall semesters. Their daughter is a full-time graduate student. The Mitchells also paid 33.800 for their son\'s tuition for the Spring and Fall semesters n the Fall of 2016, their son, Ron began his sophomore year of college. The son atten college full-time. 3,340- Compute the Mitchells\' 2016 education tax credit if their AGI is $121,600. How much of their credit is refundable versus nonrefundable? a. b. Same as in Part a., except that the Mitchells\' AGI is $174,360. 159

Solution

Answer

(a) if AGI is $122600 than Mr Mitchells get $2000 per studend hence $4000 tax credit as refund and no deduction form AGI

(B) if AGI is $ 174360 than Mr Mitchells get nothing as tax credit as well as no deduction from AGI.

Under the law

Tax Break	Maximum Benifit	Qualificatin	AGI(SINGLE)	AGI (Married)
American Oppportunity Tax Credit	$2500 per student	Degree programme	$80000 to $90000	$160000 to %190000
Life Time Learning	$2000 Per student	Low to Modrate income	$55000 to $65000	$110000 to $130000
Tution and fees deduction	$ 4000 Deduction	N/A	$65000 to $80000	$130000 to %160000