Marcia and Tim, a married couple, file a joint return in 2019.Marcia went back to college this year as a full-time graduate student.What is the maximum reduction they can achieve in their taxes for the $6,800 in tuition that Marcia pays if their AGI is $118,000 and the LLC phaseout range is $116,000-$136,000?

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The Lifetime Learning Credit (LLC) allows for a 20% credit on up to $10,000 of qualified education expenses. However, since their AGI is within the phaseout range, the credit is reduced. The reduction is calculated as follows: $2,000 maximum credit - [($118,000 - $116,000) / ($136,000 - $116,000) * $2,000] = $1,224.

Marcia and Tim, a Married Couple, File a Joint Return