The amount your entering is the amount of education expenses that can be used for education credits on your personal return.... since the AOTC only credits up to $4k in education expenses and the LLC is up to $2k, you can reduce this number to $4k or less and see how it impacts your return, and then see how making income taxable to the student would impact them. Many actually want their students to have income so they can open IRA's or as long as their rate is lower than the amoun of the education credit earned by the parent.
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