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Education
Yes, but how much is up to you based on IRS limitations. Box 5 - box 1 = taxable income is the lowest income, no scholarship route but usually not the best route. There is enough money for somebody to get an education credit.
You can say box 5 $13,000 covered $6500 in tuition and the rest went to dorms. That allows $4,000 for AOTC with an income of $13000-6500 = $6500 taxable income. The small increase in taxable income should be vastly outweighed by the large credit.
The credit and income limits:
- For the full credit, your MAGI (modified adjusted gross income) is less than $80,000 ($160,000 if you're filing jointly)
- For a reduced credit, your MAGI is between $80,000 and $90,000 ($160,000 and $180,000 if you're filing jointly)
- There is no credit given if your MAGI is above $90,000 ($180,000 if you’re filing jointly)
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February 8, 2024
1:50 PM