Tom and Anita Are Married, File a Joint Return with an AGI

question 11

Essay

Tom and Anita are married, file a joint return with an AGI of $165,000, and have one dependent child, Tim, who is a first-time freshman in college. The following expenses are incurred and paid in 2016:
$\begin{array}{ll}\text { Tuition, fees and textbooks } & \$ 11,000 \\\text { Room and board } & \$ 5,000\end{array}$
What is the maximum education credit allowed to Tom and Anita?

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Definitions:

Working Capital

The difference between a company's current assets and current liabilities, indicating the short-term financial health and operational efficiency of the business.

Cost of Trade Credit

The effective interest rate associated with taking discounts offered by suppliers for early payment or the cost of forgoing those discounts.

Net 30

A payment term indicating that full payment is due within 30 days of the invoice date.

Terms

Conditions and parameters under which credit is extended by a lender to a borrower, including the repayment schedule, interest rate, and maturity date.