question 3/6\nwhat is the key difference between a deduction and a credit?\ndeductions are used for future…

question 3/6\nwhat is the key difference between a deduction and a credit?\ndeductions are used for future tax bills, and credits are used to help with past tax bills.\ndeductions reduce the amount of income that can be taxed, and credits reduce the amount of taxes you owe.\ndeductions report your spending, and credits report how much you borrowed.\ndeductions refer to money spent on goods, and credits refer to money spent on services.

question 3/6\nwhat is the key difference between a deduction and a credit?\ndeductions are used for future tax bills, and credits are used to help with past tax bills.\ndeductions reduce the amount of income that can be taxed, and credits reduce the amount of taxes you owe.\ndeductions report your spending, and credits report how much you borrowed.\ndeductions refer to money spent on goods, and credits refer to money spent on services.

Answer

Brief Explanations:

Deductions lower taxable income by reducing the base amount subject to tax calculation. Tax - credits directly reduce the actual tax liability amount. For example, if you have a $1000 deduction and your tax rate is 20%, it saves you $200 in tax ($1000 * 0.2). A $1000 tax - credit saves you the full $1000 in tax.

Answer:

B. Deductions reduce the amount of income that can be taxed, and credits reduce the amount of taxes you owe.