Would You Rather Have a Tax Deduction or Tax Credit
You have $1,000. Would you rather have the money as a tax credit or a tax deduction? Find out which option would give you the most money in this short video.
If you answered tax credit, you are correct! A tax credit directly reduces your taxes. In contrast, a tax deduction reduces the taxable income and is subject to your tax rate, reducing the amount you would receive.
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About the Author: Shelly Spata, CPA
Shelly Spata joined the firm in 1998, and her name went on the door in 1999. She now serves as the Managing Partner of the firm. "As a business owner myself, I understand the complexities and challenges business owners face, and I strive to add value by helping clients understand their financial statements, manage tax consequences, and clearly see the financial and tax ramifications — both positive and negative — of decisions they make," she explains. "Without good financial information, it’s like driving a car blind, but with good information, clients are able to maximize profits."
