1. What's the Difference Between a Tax Deduction and a Tax Credit?

    What's the Difference Between a Tax Deduction and a Tax Credit?

    You're offered the choice between a $1,000 tax deduction or a $1,000 tax credit: Which do you take? If you're not familiar with the difference between tax deductions and tax credits, you won't know which represents the better deal for your tax return. They both reduce the amount of your hard-earned cash that goes to the government, but in different ways. Below, I'll explain how the mechanics of tax deductions and tax credits differ, as well as walk you through some of the most popular ones.

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