Let’s talk a little bit about tax credits and tax deductions.
Both can be used to help reduce or avoid taxation but behave differently when it comes to doing so.
Tax deductions are beneficial because help lower the amount
of your income subject to taxation. Deductions may be either “above the line” or for AGI, or “below the line” or from AGI. The line in the sand in this
scenario is of course, AGI (adjusted gross income).
Above the line deductions are beneficial because they reduce gross income to arrive at AGI. A lower AGI may result in being able …Read More