Tax Credits vs Tax Deductions: Which One Is Better in 2021?
LyfeAccounting
MAY 3, 2021
The tax deduction focuses on lowering your taxable income NOT your tax liability. Your taxable income is going to be based on how much money you made and the tax bracket you fall into. So, if you are in the 24% 2021 tax bracket and then a $2,000 deduction saves you $480 on your tax liability (which is $2,000 x 24%).
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