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Income Tax Planning
Chapter 9: Tax Credits/DEDUCTIONS VS. CREDITS
Warren Academy Course SyllabusSyllabus Slides
Chapter Study Session

Chapter 9: Tax Credits

DEDUCTIONS VS. CREDITS

01.Core Concepts

Deductions • Reduce the income tax base (income subject to tax) Credits • Reduce the income tax liability • In a 33% income tax bracket, $1 of credit is worth $3 of deductions. • Gives equal benefit regardless of marginal tax bracket