CM The difference between tax credits and deductions

What is a tax credit?

• A penalty for not paying taxes on time

• A way to increase your tax bill

• A method to lower your taxes by meeting specific criteria

• A fee charged by the government

How does a tax credit affect the amount of income tax you owe?

• It increases the amount of income tax you owe

• It has no effect on the amount of income tax you owe

• It reduces the amount of income tax you owe

• It doubles the amount of income tax you owe

Which tax credit helps offset the costs of adopting children?

• Child Tax Credit

• Saver's Credit

• American Opportunity Tax Credit

• Adoption Credit

What is the maximum income for an individual to qualify for the saver’s credit?

• $64,000

• $32,000

• $90,000

• $180,000

What is the maximum income a student can have to qualify for the Lifetime Learning Credit if they file a joint return?

• A) $67,000

• B) $100,000

• C) $134,000

• D) $200,000