Joe Murray: Tax Deductions Vs. Credit

Most people are getting their records together to file their 2009 tax returns. So what is the difference between a tax deduction and a tax credit?

Financial expert Joe Murray explained the difference Monday on "Good Day."

Murray says a tax deduction is money taken off of your total income to reduce your tax liability. Murray calls a tax credit a "gift from the gods." A tax credit is a direct reduction of your total tax liability.

Murray reminded viewers to keep track of mileage because some of it is deductable.

If you drive to do volunteer work you can deduct .14 per mile. If you are moving, you can deduct .20 per mile. If you spend a lot of time driving back and forth for medical appointments, that's deductable as well at .20 per mile. Murray says you must document the mileage.

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