What is the standard deduction? Q.What is the standard deduction? A.The standard deduction reduces a taxpayer’s taxable income. It ensures that only households with income above certain thresholds will owe any income tax. Read more about What is the standard deduction?
What are tax credits and how do they differ from tax deductions? Q.What are tax credits and how do they differ from tax deductions? A.Credits reduce taxes directly and do not depend on tax rates. Deductions reduce taxable income; their value thus depends on the taxpayer’s marginal tax rate, which rises with income. Read more about What are tax credits and how do they differ from tax deductions?
What is a broad-based income tax? Q.What is a broad-based income tax? A.One that minimizes tax preferences with the goal of increasing revenue at a given rate of taxation. Read more about What is a broad-based income tax?