Difference Between A Tax Credit and Tax Deduction

Dr Friday Tax Tips - One Minute Moment
Dr. Friday Tax Tips
Difference Between A Tax Credit and Tax Deduction

Dr. Friday 0:00
Good day. I’m Dr. Friday, President of Dr. Friday’s Tax and Financial firm. To get more info go to www.drfriday.com. This is a one-minute moment.

Dr. Friday 0:12
People are always asking me what’s the difference between a tax credit and a tax deduction? And one can be a lot more effective than the other. For example, if you take a tax credit that is $1 for dollar deduction on your income, so if we say your tax liability is a tax credit of $1,000, you will reduce your taxes by $1,000. Whereas if I say you have a tax deduction of $1,000, that would be pinned on your tax bracket, which could mean that if you’re in the 22% tax bracket, you may say $220 Big difference. If you need help with taxes, call me at 615-367-0819.

Announcer 0:51
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