Question

Explain in your own words the difference between a tax credit and a tax deduction. Which one of the two is preferable? Please, include an example with your answer.

Answer #1

Tax credit directly lowers the amount you owe to the revenue service or tax department where as the tax deduction reduces the amount of your income which is subject to the taxation.

Let’s assume that your annual income subject to taxation is $100,000 and you fall within 25% tax category so your tax liability would be 100,000 * 0.25 = 25,000, now let’s say you have tax credit of $10,000 so your net tax liability would be 25000 – 10000 = 15000

Now assume that you have the same annual income but you paid 10,000 in charity which can be deducted for taxation purpose, so now your tax liability would be

= (100000 – 10000) * 0.25 = 22,500

So, tax credit is a preferable thing because it directly reduces the net tax liability due whereas the tax deduction reduces the income level which is subject to taxation.

In your own words, explain why a
tax credit is more valuable than a tax deduction of the same dollar
amount.

In your own words, explain the difference between REF and RREF.
What are the advantages/disadvantages of each,
Include an example of each.
(will rate if the answer is original and not copied)

In your own words, explain the difference between a movement
along the demand curve and a shift in demand. Then, provide an
example from your own personal life where you have experienced each
one.

what is the difference between a tax deduction and a tax
credit? Why is a tax credit more valuable?
What is a tax deduction?
A. A tax deduction is any amount of money which gets subtracted
from a person's taxable income.
B. A tax credit is any amount of money which gets subtracted
from a person's tax bill.
C. A tax credit is any amount of money which gets added from a
person's tax bill.
D. A tax deduction is...

In your own words, explain the difference between a t statistic
and a z score and include how the t distribution is related to the
normal distribution.

Explain the difference between monetary and nonmonetary assets
and liabilities. Please answer in your own words. Do not use
outside resources.

using your own words (not definition), explain the difference
between a movement along the supply curve and a shift in supply.
Also, provide an example from your own personal life where you have
experienced each one.

In your OWN words, explain the difference between “crime” and
“deviance.”

Briefly explain in your own words a difference and a similarity
between a geometric and an exponential distribution.

Explain in your own words the difference between the life of a
single adult and the life of a married adult.

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 58 seconds ago

asked 33 minutes ago

asked 40 minutes ago

asked 56 minutes ago

asked 56 minutes ago

asked 58 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago