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Which is better, a tax deduction or a tax credit?

Which is better, a tax deduction or a tax credit?

Published 3/22/12  (Modified 3/30/12)

By Marc Pearlman

A common misconception among taxpayers is that a tax credit is the same as a tax deduction. This is not only false, it's a potentially expensive case of mistaken identity.

Simply stated, tax deductions reduce taxable income. A lower taxable income translates into fewer taxes paid by the taxpayer. The IRS has created two methods for utilizing tax deductions. A taxpayer can either take a standard deduction or take itemized deductions. There are a few factors to consider when deciding which route to go.

The easier of the two routes is the standard deduction, which the IRS makes available to the majority of taxpayers. However, familiarize yourself with eligibility requirements before arbitrarily going this route. For example, a married individual filing a separate return whose spouse itemizes deductions must also itemize.

The standard deduction amounts are set forth by the IRS and are adjusted yearly based on filing status and inflation. While taking the standard deduction is the easier of the two methods to calculate, the standard deduction may not save you the most money. This is when the itemized deductions may come into play. If itemizing your deductions will save you more money, then it is prudent to itemize and is worth the extra work.

Itemizing deductions often benefit taxpayers who paid interest or taxes on a home, had big out-of-pocket medical expenses, made large charitable donations or had sizable unreimbursed employee business expenses.

A tax credit, on the other hand, is a dollar-for-dollar reduction of taxes owed. Tax credits are valuable and you Read the full article »

Citi Simplicity Card

Published 3/21/12  (Modified 2/4/14)

By Doresa Banning

The Citi Simplicity Card gets it name for being a simple, easy-to-use credit card. In other words, it doesn't have a rewards program or lots of extras. The trade off is a lower APR when compared to many of the perk-filled cards on the market. Also attractive is its long 0 percent introductory APR on purchases for 18 months and 0 percent introductory APR on balance transfers for 18 months. Also included with this offer is direct access to a service representative, no late fees ever, no penalty rate ever and no annual fee ever. Keep in mind there is a balance transfer fee of either $5 or 3% of the amount of each transfer, whichever is greater.

Other information:

  • See card offer for full terms and conditions

Citi Simplicity Card

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Road trip! Gas rebate credit cards for summer 2012

Published 3/20/12  (Modified 1/27/15)

By Justin Boyle

Editor's Note: Thank you for your interest, these offers have expired and are no longer available.

Some years ago, a schoolteacher friend of mine and I took six weeks during the summer to drive around the United States. We had a few destinations on the schedule, but mostly we just appreciated scenery, took detours, slipped through a few back roads and enjoyed the journey.

By 2006, gas prices had spiked to $3.00 a gallon. They've had ups and downs since then, but scarcely has the price of regular unleaded settled below that mark for any remarkable period of time. In summertime especially, when refineries have to switch their process to produce lighter fuels, gas prices can be downright scary.

Fortunately for would-be road warriors, some credit companies are helping to bring back the open road by offering cash back on gas. Credit cards with gas promotions are more common than you might think, and we'll look at a few examples that can help you afford to ramble the highways without completely turning out your pockets.

The best gas rebate credit cards

American Express Blue Cash Everyday and Blue Cash Preferred

Both of these cards offer choice rewards for the highway traveler. The reward structure focuses on gas and groceries, which are two of the biggest expense categories on a road trip.

Let's take a look at a breakdown for each:

Blue Cash Everyday Card from American Express

  • 3 percent cash back at at US supermarkets, up to $6,000 per year in purchases.
  • 2 percent cash back on gasoline Read the full article »

The Plum Card from American Express OPEN

Published 3/19/12  (Modified 2/25/14)

By Doresa Banning

Editor's Note: Thank you for your interest, this offer expired and is no longer available.

The Plum Card® from American Express OPEN offers businesses payment flexibility each month, including special incentives to pay early.

The Plum Card from American Express OPEN

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How far underwater are you?

Published 3/17/12  (Modified 3/19/12)

By Marc Pearlman

Back in 1986, President Ronald Reagan referred to the line "I'm from the government and I'm here to help you", as the ten most terrifying words in the English language. Well, as the housing crisis continues, the government is knocking on the door again as they roll out HARP 2.0.

The original Home Affordable Refinance Program, HARP, was created in 2009 to assist struggling "underwater" homeowners who owed more money on their homes than the home was worth. Homeowners could refinance their mortgages and take advantage of the historic low rates if they met certain eligibility requirements. However, the plan has been criticized by some pundits for falling short of expectations.

"HARP has been around for a couple of years but hasn't been that helpful to that many people," says Bob Walters, chief economist at Quicken Loans, according to Fox Business, adding that many people who needed the help were unable to qualify for it.

What's new with HARP 2.0

HARP 2.0 extends the original program until the end of 2013 and loosens some of the eligibility restrictions of the original HARP program.

In order to qualify for the original HARP program rolled out in 2009, a homeowner's loan-to-value ratio needed to be less than 125 percent. This cap left many homeowners out in the cold as their home prices dropped sharply in price causing their LTV to rise above 125 percent.

Under HARP 2.0, the 125-percent LTV cap has been removed for homeowners looking to refinance Read the full article »

Citi Platinum Select Visa Card

Published 3/15/12  (Modified 2/25/14)

By Doresa Banning

Editor's Note:  This offer expired and is no longer available.

Click here for an updated list of cards from Citi.

The introductory 0 percent APR deals with the Citi Platinum Select Visa Card make it a helpful tool if you want an interest-free period in which to chip away at a new or existing credit card balance. The 0 percent introductory APR on balance transfers and purchases is for a lengthy 18 months. The card also offers online discounts with Extra Cash from Citi: where you can enjoy discounts on gift cards, travel, merchandise and more. Other perks include Citi Identity Theft Solutions, secure, free online account management and no annual fee.*


  • No annual fee
  • Balance transfer fee of 3 percent of transfer amount
  • See card offer for full terms and conditions

Citi Platinum Select Visa Card

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