tax-credit

Vocabulary Word

Definition

'Tax-credit' is a benefit given by the government to reduce your tax bill. It's like having a special discount coupon that directly reduces the amount you owe.

Examples in Different Contexts

In personal finance, a 'tax-credit' directly reduces the amount of tax owed to the government. A financial advisor might explain, 'Claiming a tax-credit for educational expenses can significantly lower your taxable income.'

Practice Scenarios

Accounting

Scenario:

Your child's daycare expenses may entitle you to some tax savings.

Response:

Yes, I'd like to claim a tax-credit for my child's daycare expenses.

Tech

Scenario:

Investing in environmentally friendly technology can open up opportunities for significant taxation benefits.

Response:

Indeed, our green-energy innovations should qualify us for those tax-credits.