Question

In 2022, Laureen is currently single. She paid $2,560 of qualified tuition and related expenses for each of her twin daughters Sheri and Meri to attend State University as freshmen (\$2,560 each, for a total of $5,120). Sheri and Meri qualify as Laureen's dependents. Laureen also paid $1,830 for her son Ryan's (also Laureen's dependent) tuition and related expenses to attend his junior year at State University. Finally, Laureen paid $1,330 for herself to attend seminars at a community college to help her improve her job skills. What is the maximum amount of education credits Laureen can claim for these expenditures in each of the following alternative scenarios?

Answer 1

Laureen can claim education credits for some of her expenses, with the maximum amount depending on the scenario. In Scenario 1, she can claim the American Opportunity Credit for her daughters. In Scenario 2, she can claim the Lifetime Learning Credit for her own expenses and her son's expenses. In Scenario 3, she can claim both credits for different expenses.

Step-by-step explanation:

Laureen can claim education credits for some of her expenses, but the maximum amount depends on the specific scenario. In Scenario 1, she can claim the American Opportunity Credit for each of her twin daughters, which allows for a maximum credit of $2,500 per student. Since she paid $5,120 for their expenses, she can claim a maximum credit of $5,000. In Scenario 2, Laureen can claim the Lifetime Learning Credit for her own expenses and for her son Ryan's expenses. This credit allows for a maximum credit of 20% of the first $10,000 of qualified expenses. Since Laureen paid $1,330 for herself and $1,830 for Ryan, she can claim a maximum credit of $532 for herself and $366 for Ryan. In Scenario 3, Laureen can claim both the American Opportunity Credit and the Lifetime Learning Credit. This allows her to claim a maximum credit of $5,000 for her daughters and a maximum credit of $898 for herself and Ryan.