Barbara Schreihans • Oct 06, 2023
Knowledge is money!! Or is the saying knowledge is power?
Either way—the more knowledge you have about taxes—the more money you are going to save on your tax bill.
So let's take it back to some 101 tax knowledge and break down the difference between tax deductions and tax credits. And why understanding the difference can save you some serious cash.
I know you've heard me talk about tax deductions a time or two…I mean I have an entire course teaching you about hundreds of tax deductions you can take!
Your taxable income would then be reduced to $30,000, and you would pay less in taxes.
Pretty cool, right?
Let's switch gears slightly and talk about tax credits.
Unlike tax deductions, tax credits directly reduce the amount of tax you owe. So, if you owe $5,000 in taxes and have a tax credit worth $1,000, you would only owe $4,000 in taxes.
There are all kinds of tax credits out there, such as:
Research and Development Tax Credit
Child Tax Credit
Employee Retention Credit
Of course each credit has its own rules and qualifications but that's why we are here to help make sure you've taken advantage of every credit you're eligible for.
Know this:
When you take advantage of both deductions and credits…that's when you're able to significantly reduce your tax bill and keep more of your hard-earned money in your pocket.
Remember, taxes don't have to be boring—with just a little bit of education you can save thousands of dollars every year…and I don't know about you but that doesn't sound boring to me!
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