Tax Credits vs Tax Deductions: What is the Difference and Which is Better?
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- เผยแพร่เมื่อ 3 ก.ค. 2024
- Tax Credits vs Tax Deductions, which one do you think is better in 2022? Now as a tax preparer for many years, finding tax credits and tax deductions for our clients is one of the most satisfying parts of preparing a tax return. Because I was able to literally help save people thousands of dollars.
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So what is a tax credit? A tax credit directly reduces the amount of tax you owe, by giving you a “dollar for dollar” reduction of your tax liability.
Now - what is a tax deduction? Well, a tax deduction reduces how much of your income is subject to taxes. So a deduction focuses on lowering your taxable income NOT your tax liability.
Make sure you watch this entire video because the examples make EVERYTHING VERY CLEAR.
Outline for Tax Credits vs Tax Deductions:
Tax Credits vs Tax Deductions: (0:00)
What is a Tax Credit?: (1:27)
What is a Tax Deduction?: (1:55)
Are Tax Credits Better than Deductions?: (2:45)
Tax Standard Deduction: (4:09)
Example of Tax Credit vs Tax Deduction: (5:15)
The Bottom Line: (6:48)
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Disclaimer: The information provided in this video is for entertainment purposes only and is not meant to take the place of professional legal, accounting, or financial advice. If you have any legal questions about this video or the subjects discussed, or any other legal matter, you should consult with an attorney or tax professional in your jurisdiction (i.e. where you live).
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Thank you for simplifying these two terms. I spent 40 min perusing some of the videos on this topic, and your video was by far the easiest to follow. Thank you for dumbing it down for me!
You best believe I wanna know what all credits are out there. 👍👍👍👍
Glad I'm not the only one :)
You guys are awesome! Im learning so much! Thank you
wow I barely noticed today that deductions and credits aren't the same thing and I decided to look for a video explaining it and you just explained everything really well. Thanks!
Definitely one of the most informative videos I’ve ever seen on tax information. Thanks and keep up the great work!
Definitely informative and educational!
I fancy how this tax expert breaks down the basics of credits versus deductions. I will be sharing this video. Thank you!
This video was very helpful. Thanks so much
Very informative. 👍🏾
Please make the video on what they are!!! Thanks so much!!!!
We will
Thank you!
looking forward to your next video
More to come!
Great video. I always get confused with the deductions for my business and rentals. Would love if you could do a video about this regarding rental & business deductions with examples.
Amazing!
18 likes... on our way to 1000. Good job 👍
We've got work to do 😅😅
Already there now
Thanks!!!
You guys are so easy to understand. Do you all do taxes for someone in need. What city are you. Thanks
Thanks for saying that, we aren't accepting clients yet, but subscribed and stay connected because we will soon. :)
We are in Atlanta, GA
Bummer. I’m in Los Angeles. Wish I was in Georgia.
@@strongjohn7078 Never been to LA but I always wanted to visit Hollywood and Disneyland
@@LYFEAccounting nice to visit but don’t live here. All state taxes will kill you🤦🏻♂️
Do this video again
Hope this makes some type of sense...Starting a business...which is the better way. LlC and/or DBA (currently securing startup capital)and which would give me the better tax rate from the onset HOH or Single.
Its going to be based on your revenue and profit, its too early to recommend an entity for you
Where is the video showing all the different types of tax credits ??? 🙏
Do you prepare tax returns for SC landlords?
Awesome video if I can stay in the first 10 comments on this channel on these videos can I get some one-on-one advice
How can I help you?
@@LYFEAccounting I'm going to start my LLC in the beginning of June. I have watched over 100 videos on "soft pull" personal and business credit lines.
@@LYFEAccounting also the EIDL & PPP loans available to small businesses I need someone to walk me through the pre-qualifications and application process to get access to those funds
I would prefer the pre Federal Reserve Act inwhich there was no Federal income tax!
❤
I need your services.
We will be accepting new clients soon, subscribe and stay connected!
Same