Question
Which of the following is TRUE about the difference between tax CREDITS 1point
and tax DEDUCTIONS?
O O Both lower your overall tax burden in the exact same way
ax CREDITS are a dolar amount you have applied to next year's tax return, while tax
DEDUCTIONs appy directly to this year's tax return
Tax CREDITS are subtracted from your gross income, while tax DEDUCTIONS reduce
O
the amOunt of taxes you Owe
ax CREDITS reduce the amount of taxes you owe, while tax DEDUCTIONS are
subtracted from your gross income
Answer
Tax CREDITS reduce the amount of taxes you owe, while tax DEDUCTIONS are subtracted from your gross income.