Tax Credit: A $1 credit means you pay $1 less in taxes.
Tax Deduction: A $1 deduction reduces the amount of taxable income by $1. This reduces the amount of tax you pay by the percentage your income is taxed as a result of the deduction. If you're taxed at 20% the $1 deduction saved you $0.20.
Know the difference. Congress plays word games to make you think you're getting something you aren't.
More Debt Management
Tax Deduction: A $1 deduction reduces the amount of taxable income by $1. This reduces the amount of tax you pay by the percentage your income is taxed as a result of the deduction. If you're taxed at 20% the $1 deduction saved you $0.20.
Know the difference. Congress plays word games to make you think you're getting something you aren't.
More Debt Management
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