Tax Deductions: CNBC Explains

Tax Deductions: CNBC Explains

Tax deductions are an important part of calculating your annual income. But many people are unclear about how deductions affect overall tax payments. The good news? There's a simple calculation you can do, depending on your tax bracket, to help you estimate the effect. Salman Khan of the Khan Academy works through an example.

Tax deductions are an important part of calculating your annual income. But many people are unclear about how deductions affect overall tax payments. The good news? There’s a simple calculation you can do, depending on your tax bracket, to help you estimate the effect. Salman Khan of the Khan Academy works through an example.

From this video, you’ll understand:

• Basic misconceptions about tax deductions
• How tax deductions reduce taxable income