If a person were in the 15% tax bracket and given the choice of a $500 credit or a $2500 deduction

Name: If a person were in the 15% tax bracket and given the choice of a $500 credit or a $2500 deduction
Brand: Quizplus
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Question

Quizplus · Accepted Answer

A tax credit directly reduces the amount of tax you owe, dollar for dollar. A $500 credit saves you $500 in taxes. A $2500 deduction reduces your taxable income, so in the 15% tax bracket, it would only save you $375 ($2500 * 0.15), making the $500 credit the better option.

If a Person Were in the 15% Tax Bracket and Given