Tax credits are amounts that you can subtract from the amount of tax you owe.
There are two types of tax credits.
- Nonrefundable
- Refundable
The tax credits for individuals can also be divided as:
- Family and dependent credits
- Income and savings credits
- Homeowner credits
- Health care credits
- Education credits
Individual tax deductions are amounts that you subtract from your income before you figure out the amount of tax you owe.
Like tax credits, tax deductions can be of different types:
- Work related deductions
- Itemized deductions (included here are property taxes and charitable donations)
- Education deductions (student loan interests are classified as education deductions)
- Health care deductions
- Investment related deductions
More details can be found on the Internal Revenue Service website