How Do Tax Credits Work? Understanding Your 1040 Tax Credits

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Tax credits are the best of tax breaks. Deductions come off your income, reducing it so you pay taxes on less earnings, and that's a good thing. But tax credits subtract directly from your tax liability—what you owe the IRS. Their effect is the same as if you had made a payment of your hard-earned money to the IRS.

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Original Article Source Credits:   The Balance , https://www.thebalance.com/

Article Written By:  William Perez 

Original Article Posted on:  October 31, 2020

Link to Original Article:  https://www.thebalance.com/tax-credits-3193143

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