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Which of the following does not decrease the amount of taxes owed to the government?

a. Interest income
b. Tax credit
c. Standard deduction
d. Personal exemption

User Coherent
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1 Answer

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Final answer:

Interest income does not decrease the amount of taxes owed, whereas tax credits, standard deductions, and personal exemptions (when they were available) do reduce taxable income or tax owed.

Step-by-step explanation:

Among the options given, interest income does not decrease the amount of taxes owed to the government. Instead, it is a form of income that is generally taxable. On the other hand, a tax credit directly reduces the amount of tax you owe, a standard deduction lowers your taxable income, and a personal exemption also reduces your taxable income, though personal exemptions were eliminated with the Tax Cuts and Jobs Act for the years 2018 through 2025.

User Sandrene
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