Final answer:
The difference resulting from a $1500 tax credit versus a $1500 tax deduction for a single taxpayer with $47000 of pre-tax income is $8800.
Step-by-step explanation:
To calculate the difference resulting from a $1500 tax credit versus a $1500 tax deduction for a single taxpayer with $47000 of pre-tax income, we first need to understand the difference between a tax credit and a tax deduction.
A tax credit directly reduces the amount of tax owed. In this case, a $1500 tax credit would be subtracted from the taxpayer's total tax liability.
A tax deduction, on the other hand, reduces the taxpayer's taxable income. The taxpayer would only be taxed on $47000 - $1500 = $45500 of their income.
Let's assume a tax rate of 20%. The difference in taxes paid between the tax credit and the tax deduction can be calculated as:
Taxes paid with tax credit: $1500 * 0.20 = $300
Taxes paid with tax deduction: ($47000 - $1500) * 0.20 = $9100
Therefore, the difference resulting from a $1500 tax credit versus a $1500 tax deduction for a single taxpayer with $47000 of pre-tax income is $9100 - $300 = $8800.