What’s The Difference Between a Tax Credit & A Tax Deduction?

Dr Friday Tax Tips - One Minute Moment
Dr. Friday Tax Tips
What's The Difference Between a Tax Credit & A Tax Deduction?

Dr. Friday 0:00
Good day. I’m Dr. Friday, president of Dr. Friday 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, “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 a dollar 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 depend on your tax bracket, which could mean that if you’re in the 22% tax bracket, you may save $220. BIG difference. If you need help with taxes, call me at 615-367-0819.

Announcer 0:51
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