Comments on: How tax deductible are charitable donations and home equity loans? http://nxus.net/how-tax-deductible-are-charitable-donations-and-home-equity-loans.html Solution to your Niche Question Sat, 15 Oct 2011 00:02:34 +0000 hourly 1 http://wordpress.org/?v=3.1 By: Kristy http://nxus.net/how-tax-deductible-are-charitable-donations-and-home-equity-loans.html/comment-page-1#comment-46 Kristy Sun, 02 Aug 2009 07:52:44 +0000 http://nxus.net/how-tax-deductible-are-charitable-donations-and-home-equity-loans.html#comment-46 No, these become part of your Itemized Deductions if you plan to itemize. The Itemized Deductions reduce your taxable income, which in turn decreases the amount of tax you would owe. For example (all hypothetical numbers), if your gross income 20,000 and your itemized deductions are 6,000, then your taxable income becomes 14,000. And the tax is calculated off 14,000. (Of course there is still an exemption to account for, but that's not what we are talking about). Tax credits reduce your amount of tax directly. Deductions reduce your income. I hope this all makes sense. No, these become part of your Itemized Deductions if you plan to itemize. The Itemized Deductions reduce your taxable income, which in turn decreases the amount of tax you would owe.

For example (all hypothetical numbers), if your gross income 20,000 and your itemized deductions are 6,000, then your taxable income becomes 14,000. And the tax is calculated off 14,000. (Of course there is still an exemption to account for, but that’s not what we are talking about).

Tax credits reduce your amount of tax directly. Deductions reduce your income. I hope this all makes sense.

]]> By: LifesAMystery http://nxus.net/how-tax-deductible-are-charitable-donations-and-home-equity-loans.html/comment-page-1#comment-47 LifesAMystery Sun, 02 Aug 2009 07:52:44 +0000 http://nxus.net/how-tax-deductible-are-charitable-donations-and-home-equity-loans.html#comment-47 The deductible is to the amount the tax percentage is applied to. So if you make $50,000, you can deduct $1,000 to make your base $49,000. And then 15% is applied to the new base. This is a very basic explanation - a lot more goes into it. But this should give you an idea. The deductible is to the amount the tax percentage is applied to. So if you make $50,000, you can deduct $1,000 to make your base $49,000. And then 15% is applied to the new base.

This is a very basic explanation – a lot more goes into it. But this should give you an idea.

]]> By: Wayne Z http://nxus.net/how-tax-deductible-are-charitable-donations-and-home-equity-loans.html/comment-page-1#comment-48 Wayne Z Sun, 02 Aug 2009 07:52:44 +0000 http://nxus.net/how-tax-deductible-are-charitable-donations-and-home-equity-loans.html#comment-48 No. A deductable expense reduces your taxable income which is used to calculate the tax. For example: If you are in the 25% bracket, a $1000 donation (or home loan interest) would save you $250 in taxes ($1000 x 25%). No.

A deductable expense reduces your taxable income which is used to calculate the tax.

For example: If you are in the 25% bracket, a $1000 donation (or home loan interest) would save you $250 in taxes ($1000 x 25%).

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