We are currently advising Jefferson on his 2018 tax return. We would like some advice concerning possible education deductions and credits by December 7, 2018. Jefferson works as a fisherman (as an employee) in Florida from October through December. For the current year, his wages are $80,000. Recently, Jefferson decided to go to college to become an accountant. In 2018, he enrolled in the local University to start his degree, he has been taking on-line courses as a full-time student since then. Jefferson is a single taxpayer with no dependents and claims the standard deduction. No one else can claim him as a dependent. His income tax bracket is 25%. He incurred qualified educational expenses of $7,000 for 2018. I have prepared a preliminary tax return without taking into account any education deductions or credits. The current 2018 figures are as follows: Gross Income= $80,000 Adjusted Gross Income=80,000 Taxable income = $68,000 Income tax due before any education deductions/credits = $17,400 Read page 6-29 (Section 6-3d in the ebook), page 8-24 (Section 8-7b in the ebook) and pages 8-29 through 8-31(the section on Higher Education Tax Credits in the ebook) of the text to familiarize yourself with: 1) the Deduction for Higher Education Expenses, 2) the American Opportunity Credit, and 3) the Lifetime Learning Credit. Afterwards, please prepare a memo to me so that I can advise Jefferson of the best course of action to minimize his taxes. In your memorandum you should answer the following questions:

1) What are the available deductions and credits for Jeffersons education expenses?

2) Which of these options is best for Jefferson and Why?

3) What will his final tax bill be after considering the education tax breaks