There’s a lot of confusion about the new $6,000 deduction for seniors. Dr. Friday clears up the difference between a deduction and a credit.
Transcript
G’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.
I’m gonna talk a lot about the OBBB, because especially for seniors, Social Security, there’s a lot of myths and things going on out there that you’re gonna get $6,000 if you have Social Security. It’s not going to be the same thing.
This is a deduction, right? Deductions mean we get to reduce our income. Credits mean we get to put the money in our pocket dollar for dollar.
So if we have a $6,000 deduction that you’ll be able to add if you have taxable Social Security and your income source is trackable, that’s great. But you’re not going to be $6,000 in your pocket. That is not a refundable credit.
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