Credit vs. Deduction? A Memphis CPA Can Help

Terry Griffith of the Memphis CPA firm, The Griffith Firm, explains the difference between a credit and a deduction.

The question that comes up a lot, is “what’s the difference between a credit and a deduction?”  Credit; let me give you an example.  Lets say you have a child who is younger than 17 years old and you’re filing jointly with your wife and your income is less than a hundred thousand dollars for the year.  You are entitled to a thing called the Child Tax Credit.  Now that Child Tax Credit is typically a thousand dollars for each child who’s under 17 years old.  That means you’re going to get $1000 in your pocket.  So, that is a thousand dollars you’re going to get for each child if your eligible for that particular credit.  As your Memphis CPA firm we can help you understand what will be best for you.

These Are Gold

Now, what’s a deduction?  As a Memphis CPA Firm this is probably the most talked about. One that most people think about more often than any other it seems like is charitable deduction.  If you itemize deductions on your tax return and you take a charitable deduction lets say for a thousand dollars, then that’s probably only going to save you depending on your tax bracket, that’s going to save you perhaps $250.00.  So, you can see pretty quickly that what we say as Memphis CPA’s  about credits and deductions, “deductions are silver and credits are gold.”  This is because a $1000 credit puts a thousand dollars in your pocket, a deduction for a thousand dollars may only put $150.00 in your pocket or $250.00 depending on whatever your tax bracket is.

Trust The Griffith Firm | Memphis CPA Professionals

I’m Terry Griffith of the Griffith Memphis CPA firm.  We are a Memphis CPA firm serving all of the Mid-south.  You can find us at Memphis CPA.

We at the Griffith Memphis CPA Firm really appreciate you checking out our tax preparation site.  If you’d like to see FREE videos that explain many more tax preparation questions plus go to http://cpamemphistn.com and drop you name and email in the form.  We also have a FREE report about things that every tax payer should know that we’d be glad to give you.  As a bonus as your Memphis CPA we want to offer to review your past 3 years tax returns for FREE.  This is to make sure you receive all of the deductions and credits that were available to you during those years.  As your Memphis CPA we will go over those for free.  Just let us know 662-470-4132

The Griffith Firm

We are the Griffith Memphis CPA Firm and we would like to earn your business.

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