A tax credit differs from a deduction because it comes right off of the bottom line. A deduction lowers your gross income, which means you can calculate your taxes on a lower amount. But a tax credit is subtracted later, after you've already figured out the amount of taxes you owe. It's a dollar-for-dollar credit. Among the available tax credits is one for elderly or disabled people, one for parents who pay for child care, and one for low-income wage-earners with children. Check the list of tax credits carefully because some of them are very specialized. If you qualify for a credit, it'll probably be good news when it comes time to write out your check or calculate your refund. These tips are provided to give you general information about your taxes. If you have specific questions, please consult a tax advisor or call the toll-free number for Federal Tax Information and Assistance at 1-800-829-1040.
