Which term refers to the portion of income for which you are not taxed, used to reduce the amount of tax payable?

Which term refers to the portion of income for which you are not taxed, used to reduce the amount of tax payable?

• A. Budget
• B. Tax credits
• C. Quality
• D. IT

Answer: (B)

Tax credits directly reduce the tax you have to pay. Think of them as a discount on your final tax bill: after your tax is calculated, credits are subtracted from the amount due, lowering what you owe. That matches the idea of a portion of income not being taxed in a way that reduces the overall tax payable. The other terms aren’t related to lowering your tax bill—budget is about planning income and spending, quality is a general term, and IT refers to information technology.

Tax credits directly reduce the tax you have to pay. Think of them as a discount on your final tax bill: after your tax is calculated, credits are subtracted from the amount due, lowering what you owe. That matches the idea of a portion of income not being taxed in a way that reduces the overall tax payable. The other terms aren’t related to lowering your tax bill—budget is about planning income and spending, quality is a general term, and IT refers to information technology.