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Ask the Dolans: What is the difference between a tax credit and a tax deduction?

Ken and Daria Dolan, America's First Family of Personal Finance, answer your money questions every Friday.

Click here to ask Ken and Daria your question.

Everyone looks forward to tax season about as much as getting a tooth pulled ... without the anesthesia. It's almost like the IRS went out of their way to make tax rules as confusing as possible to keep you from saving money.

An important distinction you'll want to be aware of is the difference between a tax credit and a tax deduction, especially this year. One is definitely better for your total tax bill. Do you know which one it is? Watch below to find out.

Dear Ken and Daria,

What is the difference between a tax credit and a tax deduction?

-Jeff




Ken and Daria help you lower your taxes with tips for finding deductions where you may not think to look. Find this guide exclusively at Dolans.com.

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TurboTax Articles

Essential Tax Forms for the Affordable Care Act

The Affordable Care Act (ACA), also referred to as Obamacare, affects how millions of Americans will prepare their taxes in the new year. The law now includes penalties for all who haven?t obtained health insurance -- and those penalties are expected to be paid at tax time. The ACA also provides tax credits to help people pay for insurance, and you can claim those credits when you file your taxes. The Internal Revenue Service (IRS) has introduced a number of tax forms to accommodate the ACA.

Are You Exempt From Health Care Coverage?

The Affordable Care Act, or Obamacare, is an individual mandate that requires all eligible Americans to have some form of basic health coverage by 2014. Those without insurance will receive a penalty when they file their tax returns ? that is, unless they have an exemption. TurboTax's Exemption Check can help you find out whether or not you qualify for an exemption.

Mortgage Refinance Tax Deductions

When refinancing a mortgage to get a lower interest rate or obtain more favorable loan terms, you're really just taking out a new loan and using the money to pay off your existing home loan. In general, the same tax deductions are available when you're refinancing a mortgage as when you're taking out a mortgage to buy a home.

How to Determine if You Have Minimum Essential Coverage (MEC)

The Affordable Care Act, also known as Obamacare, requires most Americans to have health insurance that meets a government standard known as "minimum essential coverage," or MEC. Whether your insurance qualifies as MEC depends not on the plan itself, but on how you obtained your coverage.

Rental Property Deductions You Can Take at Tax Time

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