Paolo and Isadora Shaw are married, file a joint tax return, and have one dependent child, Dante. The Shaws report modified AGI of $148,000. The couple paid $12,900 of tuition and $19,335 for room and board for Dante, a full-time first-year student at Serene College and claimed as a dependent by Paola and Isidora. Determine the amount of the Shaws' American Opportunity credit for the year.

$2,500

Explanation:

The American opportunity tax credit (AOTC) is a measure by the IRS that is a credit for QUALIFIED education expenses paid on Eligible students.

A maximum of $2,500 in credit can be acquired per eligible student.

To qualify for the full amount of this tax credit, your Modified Adjusted Gross Income (MAGI) must be $80,000 or less ($160,000 or less for married filing jointly).

The Shaws are married and file jointly with a MAGI of $148,000 which is less than the $160,000 limit which means that they are due for the entire credit amount of $2,500 as they pay education expenses for their ONE dependant child assuming Dante meets the various eligibility criteria.

The amount of the Shaws' American Opportunity credit for the year is $2,500.

If you need any clarification, do comment. Cheers.

if you use only 25 for your entertainment and only 200 for the groceries that you really need and take out the 50 per month for the computer then that should be enough