Tax Deductions and Credits to Consider for this Tax Season
When it comes to taxes, the words deductions and credits are like music to an accountant’s ears because both help you to keep money in your pockets. While they both help you to save money, they do it differently. Tax deductions help to lower how much of your income is subject to federal income tax.
Tax credits on the other hand lower your actual tax bill dollar for dollar. There are two types of credits: refundable and non-refundable. If a credit is greater than the amount you owe and it’s a refundable credit, the difference is paid to you in a refund, but if it’s non-refundable, your tax bill will be reduced to zero.
Here are some deductions and credits you might be able to claim on your 2020 tax return.
