Why a Tax Credit Is Better Than a Tax Deduction

A tax credit is an amount of money that taxpayers can subtract directly from taxes owed to their government. Unlike deductions, which reduce the amount of taxable income, tax credits reduce the actual amount of tax owed. The value of a tax credit depends on the nature of the credit; certain types of tax credits are granted to individuals or businesses in specific locations, classifications, or industries.

Original Article Source Credits:   Investopedia , https://www.investopedia.com/

Article Written By:   TROY SEGAL

Original Article Posted on:   May 25, 2020

Link to Original Article:  https://www.investopedia.com/terms/t/taxcredit.asp