Join Jim Stice for an in-depth discussion in this video Tax deductions and tax credits, part of Finance for Non-Financial Managers.
- View Offline
- So let me ask you a question.…Which would you prefer,…a tax deduction or a tax credit?…Well, by the end of this chapter,…hopefully you'll be able to answer that question.…Now, recall in our previous example…we took our taxable income and multiplied it by our tax rate…to determine how much in tax we owed.…Well what's the impact of a tax deduction…in our simple tax system?…Let's again assume we made $100.…Remember the first $50 is never taxed.…The second $50 would be taxed at the 50% rate,…so you're going to pay $25 in tax total.…
Now, let's say of that $100,…you decide to spend $10 in a way that the government favors.…Perhaps you spend that $10 as a charitable contribution,…or you spend that $10 paying mortgage interest on your home.…So the government says,…yep, we want to encourage that behavior.…That's a good way to spend $10.…Then you're going to get a tax deduction for that $10.…So how does that tax deduction…enter into your payment of taxes?…Well now you have to compute your taxable income.…
You've made $100,…
- Interpret financial reports and make decisions based on available data
- Manage inventory and receivables
- Create an accurate budget
- Cost a product or service
- Analyze customers
- Understand your income taxes
- Communicate your contribution to the bottom line
Skill Level Appropriate for all
1. Understanding Finance and Accounting
2. Most Common Financial Reports
3. Techniques for Using Financial Reports
4. Short-Term Financial Management
5. Costing a Product or Service
Drafting a budget4m 59s
7. Income Taxes
Next steps1m 38s
- Mark as unwatched
- Mark all as unwatched
Are you sure you want to mark all the videos in this course as unwatched?
This will not affect your course history, your reports, or your certificates of completion for this course.Cancel
Take notes with your new membership!
Type in the entry box, then click Enter to save your note.
1:30Press on any video thumbnail to jump immediately to the timecode shown.
Notes are saved with you account but can also be exported as plain text, MS Word, PDF, Google Doc, or Evernote.