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Tax Deductions Guide and 20 Popular Breaks for 2018
Source:
nerdwallet.com
- Jan 3, 2019
Tax deductions and tax credits can be huge money-savers — if you know what they are, how they work and how to pursue them. Here’s a cheat sheet.
What is a tax deduction?
A tax deduction is a dollar amount that the IRS allows you to subtract from your adjusted gross income, or AGI, making your taxable income lower. The lower your taxable income, the lower your tax bill.
What is a tax credit, then?
A tax credit is a dollar-for-dollar reduction in your actual tax bill. A few credits are refundable, which means if you owe $250 in taxes but qualify for a $1,000 credit, you’ll get a check for the difference of $750. (Most tax credits, however, aren’t refundable.)
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Category: General Business
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