6008040079

Nirvana Shrestha

Coursework Form
This form should be completed for each piece of coursework submitted. for you to make a plagiarism declaration.
Please ensure that you fill in all parts of the form.

Please note that you should hand work in by the prescribed method only.

Plagiarism Declaration
By completing this form you are making the declaration below:
 The work I have submitted, in accordance with University Regulations, is all my own work and
contains no plagiarism from books, articles, the internet or anyone else’s work.
 Where I have quoted the words of another person, I have surrounded the quotation with quotation
marks and have referred to the source within the text or by footnotes.
 Where I have taken ideas more generally from other people (by using secondary sources or by reading
books, journals or articles but not specifically referring to them in the text), I have acknowledged such
use by making a named reference to the author in the coursework.
 I have included a full bibliography and/or reference list as required.

Module Title: Academic Tutor:

Taxation Dr Jeff Simcox

Module Convener: Submission Type:

Individual
Word Count (if applicable): 301 Page Count: 3

You should begin you Assignment here.

A. Explain and illustrate using examples, the differences between a tax credit and a tax deduction as
provided for under many DTT's
 Tax credit Tax deductible
Tax credit reduces the amount of the tax we Tax deduction on the other hand only reduces
owe by implying a dollar for dollar reduction the amount from our incomes that are subject
on our tax liability to tax
It can be non-refundable or refundable. It can be a standard deductible or an itemizing
deductible.
For e.g. If we qualify for a $1000 tax credit For e.g. Considering we’re in a 15% tax
and we owe $2000 in taxes, the credit would bracket, a $2500 deduction would only reduce
reduce our tax liability by $1000; keeping in our taxable income by $375 (0.15 x $2500 =
mind that several variables are at play for us to $375)
qualify for the credit
Tax deductions are designed to offset the In addition to reducing the amount you pay in
amount of income you’ll pay taxes on by taxes or increasing a refund, some tax credits
writing off expenses like tuition and can be claimed even if you have no tax
healthcare, contributions to retirement, and liability. That means that if you don’t owe any
any self-employed or capital gains losses you taxes but qualify for $1,500 in refundable tax
faced. Claiming a deduction ensures you credits, you can get these credits as a $1,500
don’t pay taxes on certain income you’ve refund.
already spent, invested or lost.
Here’s a list of some other common tax credits: Here are some examples of deductible
expenses for tax:
 Child and Dependent Care Credit
(designed to help offset the cost of  Charitable donations
childcare or taking care of an elderly  Mortgage loan interest
parent)  Medical and dental expenses
 Adoption Credit (for adoption  Tuition and fees
expenses)
 Contributions to a traditional IRA
 Child Tax Credit (for parents
 Contributions to health savings
of dependent children)
accounts (HSAs)
 Premium Tax Credit (for people who
 Mileage for business travel
purchased health insurance through the
 Unreimbursed business expenses
federal marketplace)
 Moving expenses to start a new job
 Saver’s Credit (for people who  Job search expenses
contributed to a tax-advantaged  Teacher’s educational expenses
retirement account)  Property and real estate taxes
 Lifetime Learning Credit (for higher
education expenses)