Date: Wed, 28 May 2003 15:44:21 -0700 (PDT) From: Andrew Gould <andrewgould@yahoo.com> To: www@FreeBSD.org Subject: Use of term "Tax Credit" vs "Tax Deduction" on web page. Message-ID: <20030528224421.53256.qmail@web13407.mail.yahoo.com>
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The web page: http://www.freebsd.org/donations/index.html#donating discusses the eligibility of donations as "Tax Deductions", which is most probably correct. However, the term "tax deduction" is used interchangeably with the term "tax credit". In the US, these terms have very distinct legal definitions. Please consider replacing occurrences of "tax credit" with "tax deduction". The difference is important to donors: Tax credit - A tax credit reduces your taxes directly. If you earn $1000 at a 10% tax rate, you owe $100 in taxes. A $100 tax credit would reduce your taxes by $100. Tax deduction - A tax deduction reduces your taxable income. In the example above, a $100 tax deduction would reduce your taxable earnings by $100; but would reduce your taxes by only $10. I'm not trying to be picky. I just want to prevent potential problems. Best regards, Andrew L. Gould
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