Which option will reduce your annual income taxes

Reference no: EM131923376

Question: You are in the 25% marginal tax bracket. You have the option of deducting $2,000 as an "adjustment to income" on the front page of Form 1040, or you can take a $750 tax credit on the back page. Which option will reduce your annual income taxes by the largest amount?

A. Deduct the $2,000 as an adjustment to income

B. Take the $750 tax credit

C. The two options are equivalent.

Reference no: EM131923376

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