Foundations of Tax Deductions and Credits
KNOWLEDGE EXPECTED OF: Both CFP® Professionals and QAFPTM Professionals
- Define a tax deduction.
- Explain the purpose of a tax deduction.
- Identify when claiming a deduction may be beneficial.
- Define a tax credit.
- Define the types of tax credits.
- Explain the purpose of each type of tax credit.
- Identify when claiming a tax credit may be beneficial.
- Explain the impact on taxes payable.
- Of a tax deduction
- Of a tax deduction as income varies
- Of a non-refundable tax credit1 when taxes payable exist
- Of a non-refundable tax credit when taxes payable do not exist
- Of a refundable tax credit when taxes payable exist1
Glossary of Verbs (mouse over to see definition)
To state exactly the meaning of
To be aware of / to recognize and correctly name / to locate an appropriate resource
To make clear the meaning of / to describe something in more detail or reveal relevant facts or ideas related to it
To note the similarities and differences between two or more things
To determine an approximate value for
To find the value using mathematics
To change from one form or purpose to another
To reach a conclusion or make a judgement through careful study
To give the meaning of / to construe or understand / to translate orally