Question

Which of the following lowers your overall taxable income and affects the amount of tax you pay?

Income taxes
Warranties
Audits
Tax deductions

Answer 1

Tax deductions lower your overall taxable income and affect the amount of tax you pay. They reduce the amount of income that is subject to taxation, which can result in a lower tax bill. The other options—income taxes, warranties, and audits—do not have the same effect on taxable income.