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Thus, her taxable income is negative. She owes no U.S. taxing.

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Now, let's examine if behavior whittle that down some better. How about using some relevant breaks transfer pricing ? Since two of your students are in college, let's believe one costs you $15 thousand in tuition. You have a tax credit called the Lifetime Learning Tax Credit -- worth up to two thousand dollars in this case. Also, your other child may qualify for something the Hope Tax Credit of $1,500. Talk to your tax professional for probably the most current tips about these two tax loans.

But assuming you qualify, that will reduce your bottom line tax liability by $3500. Since you owed 3,000 dollars, your tax has became zero greenbacks.