Dominic is attending his second year of college and has paid $3,500 in tuition and fees. How much can he claim for his American Opportunity Tax Credit?

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The American Opportunity Tax Credit allows for a maximum credit of $2,500 per eligible student. This is calculated as 100% of the first $2,000 of qualified education expenses, plus 25% of the next $2,000. Dominic's expenses of $3,500 exceed the $4,000 threshold, but the credit maxes out at $2,500.

Dominic Is Attending His Second Year of College and Has