Excel Solver and What-If Analysis: Optimizing Tax Refunds Involving Education Credits and Scholarships

ABSTRACT This case teaches students advanced Excel modeling functions and analytic tools like Solver and What-If Analysis. The case scenario involves preparation of a student tax return that focuses on minimizing federal income tax liability by utilizing education credits and reporting scholarships as taxable income. Solver is used to determine the optimal allocation of non-tuition-based scholarships or grants as taxable income. What-If Analysis is then used to demonstrate how a practitioner might illustrate the tax outcomes and plans in different scenarios. Additionally, critical thinking and analysis are required of students to explain how additional income affects both nonrefundable and refundable credits to find the best outcome for the client. Considering that the current CPA evolution curriculum focuses more on analytical skills, tax planning, and personal financial planning, students will benefit academically, professionally, and personally from the knowledge and skills learned in this case. JEL Classifications: A22; H24; K34.