Response to the following problems:
1. Using the Tax Rate Schedules.
The IRS publishes tax rate schedules and a Tax Table. When must taxpayers use the tax rate schedules instead of the Tax Table to compute their income tax liability?
2. Tax Credits vs. Tax Deductions.
What is the difference between a tax credit and a tax deduction? If a taxpayer with a marginal tax rate of 15% has a $1,000 deduction, how much tax will she save? How much tax will she save with a $1,000 tax credit?