Why is Turbotax asking what amount I want to use to calculate the American Opportunity Tax Credit? Why wouldn't I just put in the entire tuition and books amount?

[plallbee]

Turbotax auto-filled the line with $10,000 but the total tuition/books amount is over $24,000...

[ChristinaS · Accepted solution]

Do you have a 529 plan distribution or redemption of savings bond? If you do, the tax credit is coordinated with other benefits. You can't get 2 or more different tax benefits on the same expenses. This field helps you receive an education tax credit/ deduction first, as that is usually the better choice.

• If you qualify for the American Opportunity credit, putting more than $4000 in expenses here does you no benefit. You receive the most benefit on just $4000.
• If you qualify for the Lifetime Learning Credit, you get the most on $10,000
• If you qualify for the Tuition and Fees Deduction, you get the most on $4000.

Don't put $24,000 in this box, as no benefit is better with more than the amounts listed above.