Suppose that you owe $4,000 in income taxes but manage to reduce that amount by $2,000 because you paid college tuition that year.The subtraction of $2,000 is a(n):

Question

Quizplus · Accepted Answer

The subtraction of $2,000 due to paying college tuition is a tax credit. Tax credits directly reduce the amount of taxes owed, while deductions and exemptions reduce the amount of taxable income.

Suppose That You Owe $4,000 in Income Taxes but Manage