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In Business / High School | 2025-07-08

What's the difference between a tax credit and a tax deduction?

Asked by m3266

Answer (2)

A tax credit directly reduces the amount of tax owed, while a tax deduction lowers the taxable income. Tax credits can be more beneficial because they provide a direct reduction in tax liabilities. Understanding the difference can help taxpayers maximize their savings during tax season.
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Answered by Anonymous | 2025-07-08

Tax deduction lowers your taxable income.

Tax credit lowers your actual tax owed.

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Answered by seewahdiane2003 | 2025-07-08

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