You probably know about taking deductions to reduce your tax liability. To be clear, deductions are not the same as tax credits – deductions are applied to your earned income before calculating taxes, and thus reduce the amount on which you are taxed. Tax credits are more valuable, and are a direct credit towards the tax that is due.
When you do your taxes each year, you can either take a standard deduction, or you can keep a record of tax deductible expenses and choose to use that if it is greater. For 2008 the standard deduction is … Read more at 2008 Taxes.
