Keith has a 2015 tax liability of $2,250 before taking into account his American Opportunity tax credit. He paid $2,600 in qualifying expenses, was a full-time student, was not claimed as a dependent on his parents' return, and his American Opportunity tax credit was not subject to phase-out. What is the amount of his American Opportunity tax credit allowed?

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The American Opportunity tax credit is worth up to $2,500 per year for eligible students. However, the credit is phased out for taxpayers with modified adjusted gross income (MAGI) above certain levels. Since Keith's credit was not subject to phase-out, he is eligible for the full $2,500 credit. Since his tax liability before the credit was $2,250 and he can only claim up to the amount of his liability, he can claim a credit of $2,250, reducing his tax liability to $0.

Keith Has a 2015 Tax Liability of $2,250 Before Taking