What is the difference between investment tax credits and deductions?

What is the difference between investment tax credits and deductions?

Investment tax credits reduce your tax bill directly, while deductions lower your taxable income.

Can you give me an example of each?

Sure! A tax credit might be a 10% credit on a solar panel installation, while a deduction could be a $1,000 deduction for business expenses.

Which one is more beneficial for taxpayers?

It depends on individual circumstances. Tax credits are generally more beneficial as they reduce tax owed dollar-for-dollar.

Are there specific investments that qualify for these credits?

Yes, investments in renewable energy, low-income housing, and certain business expansions often qualify for tax credits.