Scenario 2: Dana Glendale Dana is 44, unmarried, and earned $40,000 in wages. Da

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Scenario 2: Dana Glendale Dana is 44, unmarried, and earned $40,000 in wages. Dana’s 22 -year-old son, Tom rents an apartment near campus during the school year and spends summer at home with his mother. Tom is a full time student who is in his 3rd year of college working towards his degree in chemical engineering. Tom does not have a felony drug conviction. Dana paid $4,000 of Tom’s tuition that was not covered by his scholarship. Dana provided more than half of her son’s support and all the cost of keeping up her son’s apartment. Tom’s only income was $3,800 in wages. Dana and Tom are U.S. citizens and have valid Social Security numbers.
Question 1: Who can claim the American opportunity credit? Question 2: Dana’s most advantageous allowable filing status is:
Scenario 2: Dana Glendale Dana is 44, unmarried, and earned $40,000 in wages. Dana’s 22 -year-old son, Tom rents an apartment near campus during the school year and spends summer at home with his mother. Tom is a full time student who is in his 3rd year of college working towards his degree in chemical engineering. Tom does not have a felony drug conviction. Dana paid $4,000 of Tom’s tuition that was not covered by his scholarship. Dana provided more than half of her son’s support and all the cost of keeping up her son’s apartment. Tom’s only income was $3,800 in wages. Dana and Tom are U.S. citizens and have valid Social Security numbers.
Question 1: Who can claim the American opportunity credit? Question 2: Dana’s most advantageous allowable filing status is:
Dana is 44, unmarried, and earned $40,000 in wages. Dana’s 22 -year-old son, Tom rents an apartment near campus during the school year and spends summer at home with his mother. Tom is a full time student who is in his 3rd year of college working towards his degree in chemical engineering. Tom does not have a felony drug conviction. Dana paid $4,000 of Tom’s tuition that was not covered by his scholarship. Dana provided more than half of her son’s support and all the cost of keeping up her son’s apartment. Tom’s only income was $3,800 in wages. Dana and Tom are U.S. citizens and have valid Social Security numbers.
Question 1: Who can claim the American opportunity credit? Question 2: Dana’s most advantageous allowable filing status is:

Explanation / Answer

Answer to Q1

Dana Glendale can claim AOC because

- Scope of credit have expanded and it can claimed for four years of post-secondary education instead of two.

- It is allowed for a taxpayer whose modified adjusted gross income is $80,000 or less ($160,000 or less for joint filers) for the qualified expenses of an eligible student.

- Tom's expenses are eligible and is an elegible student too.

Answer to Question 2

Dana’s most advantageous allowable filing status would be Head of Household

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