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| thekcirp - 3/23/2024 13:23 a tax credit is usually not 'given $10,000'. It's like a farm expense at tax time. It's dropping your taxable income by 10K. May get some into lower tax
brackets, but would really only save you what your tax rate is, times the 10K. So he is only gonna 'give' most people 3K or less. Also, your particular
state may not recognize the tax credit, therefore no state tax deduction. Still would be a nice little shot on the arm.
No, a tax credit is like having $10,000 of prepaid tax. If you have a tax liability of $15,000 and a tax credit of $10,000 you only owe $5000 to the IRS.
A $10,000 tax credit is far more valuable than a $10,000 deduction. And, in many cases tax credits are refundable. If you don't owe $10,000 you could get a check from the IRS for the unused portion.
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Financial thought
