assessment\nquestion 1 of 8\nwhat is the key difference between a deduction and a credit?\nselect a…

assessment\nquestion 1 of 8\nwhat is the key difference between a deduction and a credit?\nselect a response.\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.

assessment\nquestion 1 of 8\nwhat is the key difference between a deduction and a credit?\nselect a response.\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, while tax - credits directly reduce the tax liability. For example, if your income is $50,000 and you have a $5,000 deduction, your taxable income becomes $45,000. A $1,000 tax - credit directly reduces the amount of tax you owe by $1,000.

Answer:

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