1. Explain what type of educational expenses qualify for the American Opportunity tax credit and what type of educational expenses qualify for the lifetime learning credit.

2.For 2019, Randy, an unmarried taxpayer, has wages of $45,000. He has a significant amount of income from dividends and interest and therefore expects to have a federal income tax liability of $18,000. His total federal income tax withholding for the year is $9,500. Randy had $100,000 of adjusted gross income and a federal tax liability of $11,000 on his 2017 return. To avoid a penalty for underpayment of estimated taxes, what is the minimum amount of total estimated tax that Randy must pay in 2019? Assume the payments are made on a timely basis.

3.

For each of the following situations, indicate the nature and amount of the penalty that could be imposed. (The penalties include both tax practitioner penalties and taxpayer penalties).

A. Description of the Penalty B. Penalty Amount

a.	Kyle files his tax return on the original due date and pays the entire balance of tax due of $5,000. He did not pay any estimated tax during the year and had no withholding. His prior year tax return showed a tax liability of $12,000 (do not calculate the penalty).

B. Manny prepares a tax return for his client who requests that Manny disregard a current tax law which would increase his tax liability by $17,000. Manny agrees to do so since he does not want to lose this important client.