Question

A tax deduction has a greater impact on maximizing after tax dollars than a tax credit

Answer 1

Tax credit is always better than tax deduction.

Tax credit is the waiving of tax directly whereas tax deduction is the reduction of the adjusted gross income.

For example if your adjusted gross total income is 1000 and your tax is 300,then if the tax credit is 100 then the tax you need to pay is 300-100=200 saving a tax of 100.

And if tax deduction is 100 then the gross adjusted income shall become 1000-100=900.

Then the tax shall become 270 saving 30 on tax.