Question

What is the difference between a tax credit and a tax deduction?

Answer 1

Tax credits provide dollar for dollar reduction of the persons income. meaning $1,000 tax credit saves $1,000 taxes. Tax deductions lower taxable income and then they equal the % of the persons marginal tax bracket.

Explanation:

a p e x

Answer 2

tax credits provide dollar for dollar reduction of the persons income. meaning $1,000 tax credit saves $1,000 taxes.

Tax deductions lower taxable income and then they equal the % of the persons marginal tax bracket