difference between tax deduction and tax credit ontario
If you earned $125,000 last year and can deduct $10,000, your taxable income would be reduced to $115,000. If you lived in Ontario, your deduction would save you just over $4,000 in taxes. On the other hand, a $10,000 tax credit would only be worth $2,105.The above seems to suggest that deductions are always better than tax credits, but not always: A tax credit and deduction would result in the same savings if you earned $35,000.he tax credit amount is what the actual tax credit is based on. The actual credit is a percentage of the credit amount expressed as the lowest tax rate. Every Canadian is entitled to claim the Basic Personal Amount which is $10,320 for 2009. The actual federal tax credit is 15% of $10,320 or $1,548.