Deductions vs. Tax Credits – What’s the Difference?

This video covers the following learning objectives:

• Describe the major deductions available to a taxpayer

  • Covered by explaining what deductions are, how they reduce taxable income, and listing common examples such as RRSP contributions, union dues, childcare expenses, and moving expenses.

• Show how tax credits can be used to lower tax payable

  • Covered by defining tax credits, differentiating refundable vs. non-refundable credits, showing how credits directly reduce taxes owed, and providing examples (e.g., basic personal amount, tuition credits, charitable donations).

A comparative example shows the power of deductions and credits.