Georgia Private School Tax Credit 2011

A HIDDEN GEORGIA TAX CREDIT YOU DON’T WANT TO MISS FOR 2011! Tax write-off.  Tax credit.  Heard these terms before?  Most people have.  The problem is, tax professionals and non-tax professionals alike tend to throw them around as if they mean the same thing.  They do not mean the same thing. Tax write-offs (sometimes called “deductions”) refer to items that can decrease your taxable income, which is the number that the government will use to calculate your tax bill (using the tax rate percentages).  By comparison, a tax credit means something much different.  It is an amount that actually reduces your tax owed.  For example, let’s look at someone with $100,000 in taxable income (at a 30% tax rate) and the difference between a $2,500 tax deduction and a $2,500 tax credit. Tax Deduction:       Tax Credit: $100,000 taxable income $100,000  taxable income        30% tax rate        30% tax rate $30,000 taxes due $30,000 taxes due –2,500tax credit $27,500 adjusted taxes due $100,000 ...

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