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ACCT355Assignment6(Education)F21

The assignment requires students to create an Excel spreadsheet using formulas to calculate tax deductions related to education expenses for the Brown family in 2020. Key expenses include tuition, room and board for their three college-attending children, as well as professional education costs for the parents. Students must follow a specified tax formula and submit their work via email by November 30, with an option for feedback if submitted earlier.

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3 views

ACCT355Assignment6(Education)F21

The assignment requires students to create an Excel spreadsheet using formulas to calculate tax deductions related to education expenses for the Brown family in 2020. Key expenses include tuition, room and board for their three college-attending children, as well as professional education costs for the parents. Students must follow a specified tax formula and submit their work via email by November 30, with an option for feedback if submitted earlier.

Uploaded by

zanerjones2
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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ACCT 355 - Livingstone - Assignment 6 (Education) (worth 10 points)

Due Tuesday, Nov. 30 by 11:59 pm (submit by 8:00 pm for feedback).

An Excel spreadsheet using formulas and cell referencing is required for this assignment. I am willing
to provide feedback by email if submitted no later than 8:00 pm on Tuesday, Nov. 30. All assignments
will be submitted by email to [email protected] . Note that there will be a similar problem on the
exam and if you create a good worksheet it will be fast and easy to complete the exam problem in Excel
and submit it.

Tax Breaks for Education

In 2020, Margery and Philip Brown have three children attending college full-time and they claim all
three as dependents. They also have education related expenses for themselves. They paid for the
following expenses:

1. Their daughter, Amy, is a Masters student in both Spring 2020 and Fall 2020 at Wake Forest where she
received a scholarship for part of her tuition. Her parents paid a total of tuition of $10,000 and
room & board of $6,200 (all paid in 2020). Amy purchased her own textbooks at a cost of $1,200.

2. Their son, Brad, is a freshman in Spring 2020 and a sophomore in Fall 2020 at Appalachian State
University. His parents paid a total of tuition and fees of $6,400 and room & board of $7,100 (all
paid in 2020).

3. Their daughter, Elizabeth, started at UNC-CH as a freshman in Fall 2020. She receives a scholarship
that covers her tuition but her parents paid required fees of $1,500. Her parents also paid room &
board of $4,700 and textbooks for $1,300.

4. Margery is a teacher with Jackson County and has a professional educator’s license in North Carolina.
To renew her license, she is required to complete 10 semester hours or 15 units of renewal credit
every 5 year. She has taken online courses through Western Carolina’s College of Education and
Allied Professions. She paid tuition and fees of $1,700. She also spent $600 for textbooks. None
of her expenses were reimbursed.

5. Philip is a self-employed lawyer. He completed continuing education courses that are required to meet
the requirements of North Carolina State law and cost $2,900. (You can ignore any effects on self-
employment tax.)

6. Philip is also paying off student loans from law school. He paid $3,200 of interest in 2020.

Other information related to their tax return:


AGI before the effects of education related deductions 130,000
state income tax payments 8,300
real estate taxes 3,200
home mortgage interest 10,100
charitable contributions 5,500
The following outlines the application of the tax formula to Assignment 6:

1. AGI before education deductions


2. Subtract: for AGI education related deductions
a. Professional education for a self-employed individual
b. Student loan interest deduction
c. Tuition & fees deduction
3. AGI
4. Subtract: Itemized Deductions
a. Taxes (limited to 10,000), interest, and charitable
5. Taxable Income
6. Tax – calculate tax on taxable income using the tax rate schedule (write an Excel formula to do the
calculation)
7. Subtract: Credits
a. American Opportunity Credit (AOC)
b. Lifetime Learning Credit (LL)
i. Be certain to consider any phase outs
c. Child Tax Credit - $500 per child >17 (phase out does not start until $400,000 for married-
joint)
8. Tax after Credits

There are 2 correct solutions but one solution results in significantly lower tax. 2 points of extra credit
will be awarded for the tax minimizing solution. Students won’t be told that it is the tax minimizing
solution until all solutions are submitted.

CUT & PASTE THIS TABLE INTO YOUR EXCEL WORKSHEET (Calculations will be done in other
parts of your worksheet but your answers will be laid out all together in this table.)

AGI before education deductions


Professional education for a self-employed individual
Student loan interest deduction
Tuition & fees deduction
AGI
Itemized Deductions (taxes (limited to 10,000), interest, and charitable)
Taxable Income

Tax – calculate tax on taxable income using the tax rate schedule
American Opportunity Credit (AOC)
Lifetime Learning Credit (LL) (needs phase out)
Child Tax Credit - $500 per child >17
Tax after Credits

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