🚀 Module 2

The Difference Between Tax Credits vs. Deductions (and How Both Can Save You Money)
– Free

Overview

  • Understanding the distinction between tax credits and deductions is crucial for effective tax planning. This module will explain these differences and illustrate how each can lead to tax savings.​

     Key Points:

    • Tax Deductions: Reduce your taxable income, thereby lowering the amount of income subject to tax.

    • Tax Credits: Provide a dollar-for-dollar reduction of your tax liability, directly decreasing the amount of tax owed.​

    • Examples: Deductions include mortgage interest and student loan interest, while credits include the Earned Income Tax Credit and Child Tax Credit.​