Tax Credits vs. Tax Deductions

by astanhaus

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What’s the difference between…

a) folk and bluegrass?

b) tax credits and tax deductions?

Headscratchers, I know.

a) I would have to say Bluegrass music makes my heel tap harder. Scientific, eh?

b) Credits reduce my tax $$ owed. Deductions reduce my taxable income.

Both tax credits and tax deductions are $$ savers. If we qualify for one, the other, or both depends on our financial situations.

I could delve deeper into the details, but I love this video too much. Watch and learn!

Thirsty for more knowledge, visit the IRS.

Happy Tax Time!

(Originally published on Amanda Stanhaus’s financial literacy blog: XO, Bettie.)