Daryl is single and has a college degree in accounting and is a self-employed CPA. His AGI is $65,000. During 2022, he enrolled in a part-time M.Acc. (Master of Accounting) program and incurred the following expenses: $5,500 (tuition), $800 (books). $200 (other school supplies), and $100 (transportation to and from campus). His maximum deduction(s) in 2022 is (are):

Question

Daryl is single and has a college degree in accounting and is a self-employed CPA. His AGI is $65,000. During 2022, he enrolled in a part-time M.Acc. (Master of Accounting) program and incurred the following expenses: $5,500 (tuition), $800 (books). $200 (other school supplies), and $100 (transportation to and from campus). His maximum deduction(s) in 2022 is (are):
a. Deduction of $0. 
b. Deduction for AGI of $6,600 and deduction from AGI of $0. 
c. Deduction for AGI of $4.000 and deduction from AGI of $0 
d. Deduction for AGI of $4.000 and deduction from AGI of $2.600

Bot · Answer

The maximum deduction that Daryl can claim in 2022 is a deduction for AGI of $4,000 and a deduction from AGI of $2,600.

The tuition expenses of $5,500 can be claimed as a deduction for AGI, up to a maximum limit of $4,000. Therefore, Daryl can deduct $4,000 from his AGI.

The books and supplies expenses of $800 and other school supplies expenses of $200 are considered miscellaneous itemized deductions, which are subject to a 2% AGI floor. Since Daryl's AGI is $65,000, the 2% AGI floor is $1,300. Therefore, the deduction from AGI for these expenses is $800 - $1,300 = $0.

The transportation expenses of $100 are not deductible as education expenses.

In total, Daryl can claim a deduction for AGI of $4,000 and a deduction from AGI of $0. Therefore, the correct answer is option c. Deduction for AGI of $4,000 and deduction from AGI of $0.