Important Notice: Our web hosting provider recently started charging us for additional visits, which was unexpected. In response, we're seeking donations. Depending on the situation, we may explore different monetization options for our Community and Expert Contributors. It's crucial to provide more returns for their expertise and offer more Expert Validated Answers or AI Validated Answers. Learn more about our hosting issue here.

Whats the difference between a tax credit and tax deduction?

April 26, 2017tax credit tax deduction

0

0 Posted

Whats the difference between a tax credit and tax deduction?

1 Answer

0

0 Posted

Tax deductions reduce tax payer’s overall taxable income with the value of the deduction dependent on the payer’s tax bracket. Tax credits on the other hand reduce the amount of tax a taxpayer owes dollar for dollar. Tax credits are more economically powerful than deductions.