CatinaT1
Expert Alumni

Deductions & credits

From your example above: 

For example,

  • I had $4000 withheld from paycheck.
  • I owe $3000 in federal tax.
  • I qualify for $1000 nonrefundable tax credit.

$3,000 in Federal Tax

$1,000 non-refundable Credit

$2,000 in Federal Tax

 

$4,000 withheld

 

$2,000 refund

 

Don't apply any withholdings until after all credits.

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