ECONOMICS
MONEY MANAGEMENT
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
estate planning
|
|
|
tax credit
|
|
|
IRA
|
|
|
tax deduction
|
Detailed explanation-1: -Tax credit is a sum that can be subtracted from the total payable tax and offsets the overall liability. If an individual is charged more tax, then the excess tax is given as a tax credit which can be adjusted against future tax liabilities.
Detailed explanation-2: -A deduction can only lower your taxable income and the tax rate that is used to calculate your tax. This can result in a larger refund of your withholding. A credit reduces your tax giving you a larger refund of your withholding, but certain tax credits can give you a refund even if you have no withholding.
Detailed explanation-3: -Deductions can reduce the amount of your income before you calculate the tax you owe. Credits can reduce the amount of tax you owe or increase your tax refund. Certain credits may give you a refund even if you don’t owe any tax.