TAX DEDUCTIONS & CREDITS: KNOWING THE DIFFERENCE

Posted by at 13 Comments Print

This may seem obvious to some but there is much confusion over the difference between a tax “deduction” and a tax “credit”. A tax deduction gets subtracted from your taxable income, which in turn lowers your taxable income, which lowers your taxes.

For example, if you have $50,000 income and a $5,000 deduction, your taxable income is $45,000.  So you are not going to pay tax on $5,000 of your income.  In a 30% tax bracket you would save $1,500 (which is 15% of $5,000) Now, let’s take the same example but this time with a $5,000 tax credit.  The income tax on $50,000 would be $15,000 (in a 30% tax bracket).   With a $5,000 tax “credit”, you would subtract that $5,000 from your $15,000 tax bill and pay only $10,000 in taxes. Obviously, a tax credit is more beneficial than a deduction.

 

BLOG READY TAXES , , , , , ,

Related Posts

13 Comments


  1. best sites to buy viagra online, 2 days ago

    best sites to buy viagra online

    WALCOME


  2. cialistodo.com, 4 days ago

    cialistodo.com

    TAX DEDUCTIONS & CREDITS: KNOWING THE DIFFERENCE


  3. jueriy.com, 4 days ago

    jueriy.com

    TAX DEDUCTIONS & CREDITS: KNOWING THE DIFFERENCE


  4. is it illegal to buy generic viagra, 6 days ago

    is it illegal to buy generic viagra

    WALCOME


  5. where can i buy viagra online cheap, 1 week ago

    where can i buy viagra online cheap

    WALCOME


  6. buy pills erection viagra, 1 week ago

    buy pills erection viagra

    TAX DEDUCTIONS & CREDITS: KNOWING THE DIFFERENCE


  7. buy viagra no prescription, 2 weeks ago

    buy viagra no prescription

    WALCOME


  8. buy real viagra online, 3 weeks ago

    buy real viagra online

    WALCOME


  9. viagra without doctor prescription, 3 weeks ago

    viagra without doctor prescription

    WALCOME


  10. cheap viagra, 3 weeks ago

    cheap viagra

    WALCOME


  11. cheapest generic viagra, 3 weeks ago

    cheapest generic viagra

    WALCOME


  12. buy viagra without prescription, 4 weeks ago

    buy viagra without prescription

    WALCOME


  13. generic viagra, 4 weeks ago

    generic viagra

    WALCOME


Post Your Comments

You must be logged in to post a comment.

CALL US:

3 0 3 . M A R T I N O

EMAIL US:

Help@Troubleshooter.com

PHYSICAL ADDRESS:

4695 S Monaco St, Denver, CO 80237