Your 2021 Guide to Tax Credits
There are two main ways Americans can save money on their taxes -- tax deductions and tax credits. And here's the big difference: Tax deductions reduce the amount of income that is subject to federal income tax, while tax credits reduce the amount of tax you owe, dollar for dollar.
For that reason, tax credits can be far more valuable, but some of the most common tax credits available in the United States are not well understood by many taxpayers. So here's a look at some of the most common tax credits you should know, and how much they could save you on your 2021 federal income tax return.
Original Article Source Credits: The Motley Fool , https://www.fool.com/
Article Written By: Matthew Frankel, CFP
Original Article Posted on: Nov 15, 2020
Link to Original Article: https://www.fool.com/taxes/2020/11/15/your-2021-guide-to-tax-credits/