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August 22 , 2007

The Truth About Tax Credits and Deductions


This is the eBook version of the printed book.

This Element is an excerpt from The Truth About Paying Fewer Taxes (9780137153862) by S. Kay Bell. Available in print and digital formats.


What you need to know about tax credits, deductions, and the difference between them.


A tax credit is a dollar-for-dollar benefit. It’s applied to your final IRS bill, so you get money back or don’t have to pay Uncle Sam as much. A tax deduction, however, reduces the taxable income your final tax bill is based on. That usually means a smaller bill, but generally not by as much. You can get an idea of the value of credits by....

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