Question: 1. Brendan and Theresa are married and have three children in college. Their twin daughters, Christine and Katlyn, are freshmen and attend the same university. Their son, Kevin, is a graduate student. Brendan and Theresa pay $12,000 in tuition and fees ($6,000 each) and $1,100 in textbooks ($500 and $600 respectively) for their daughters and $4,200 in tuition and fees for Kevin and $400 in textbooks. The twins' room and board is $2,600, while Kevin's room and board is $1,400. Brendan and Theresa have an adjusted gross income of $77,000.
a. What amount can they claim as a tax credit for the higher education expenses they pay?
b. Assume that their adjusted gross income is $116,000. What amount can they claim as a tax credit for the higher education expenses they pay?
c. Assume the same facts as in part a, except that Kevin is a freshman and the twins are graduate students. What amount can Brendan and Theresa claim as a tax credit for the higher education expenses they pay?
2. Determine whether each of the following taxpayers must file a return in 2016:
a. Felicia is a dependent who has wages of $6,100 and interest income of $225.
b. Jason is a dependent who has interest income of $800.
c. Jerry is self-employed. His gross business receipts are $43,000, and business expenses are $40,300. His only other income is $1,200 in interest from municipal bonds
3. Martina is single and has two children in college. Matthew is a sophomore and Christine is in her fifth year of college. Martina pays $3,600 in tuition and fees for Matthew, $700 for textbooks, and $2,000 for his room and board. Christine's tuition and fees are $4,800, her textbooks are $550, and her room and board expenses are $1,800. Martina's adjusted gross income is $55,000.
a. What amount can Martina claim as a tax credit for the higher education expenses she pays?
b. Assume that Martina's adjusted gross income is $83,000. What amount can she claim as a tax credit for the higher education expenses she pays?