Answer the following$$ questions:

Explain the distinction between a deduction and a credit.

Which is worth$$ more, a$$ $$200$ deduction or a$$ $$200$ credit?

Explain the difference between refundable and nonrefundable credits.

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Part $1$

a$.$ Explain the distinction between a deduction and a credit.

A deduction is

$$

$$

$,$

while a credit is

$$

$$

an amount that is multiplied by taxable income to determine the tax.

an amount that is subtracted from income

an amount that is subtracted from the tax itself.

the excess of tax payments over the tax liability.

Part $2$

b$.$ Which is worth$$ more, a$$ $$200$ deduction or a$$ $$200$ credit?

In$$ general, a$$ $$200$

$$

$$

credit

deduction

is worth more than a$$ $$200$

$$

$$

credit

deduction

because the

$$

$$

credit

deduction

results in a$$ $$200$ tax savings. The savings from a

$$

$$

credit

deduction

is less than$100\%$ of$$ $$200,$ depending on the tax bracket that applies to the taxpayer.

Part $3$

c$.$ Explain the difference between refundable and nonrefundable credits.