GBD3 Acct

GBD3 Acct - 13th April 2011 Module 5, Group 5, GDB 3...

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13th April 2011 Module 5, Group 5, GDB 3 Question 4: There are numerous credits that are available to taxpayers. One credit of particular interest to you as students is the education credit. Describe the difference, by providing an example, between the education adjustment and the education credit. In your answer describe which reduction is better. The government has always influenced social and economic behaviors. One behavior congress has focused on is higher education. Congress uses the Internal Revenue Code (IRS) to encourage individuals to pursue degrees. The Internal Revenue Code allows many tax incentives. These incentives vary from tax credits and tax deductions that pay qualified educational expenses. There is a difference between a tax deduction and a tax credit. Generally a tax deduction reduces one’s taxable income. The tax credit will generally reduce one’s tax liability. Determining the right educational incentive depends on one’s tax position. If one needs to lower one’s tax liability, then one would choose the credit. However, if one uses the credit, he or she cannot use
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This note was uploaded on 07/19/2011 for the course ACCT 302 taught by Professor S during the Spring '11 term at Lee.

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GBD3 Acct - 13th April 2011 Module 5, Group 5, GDB 3...

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