Which of the following statements is correct? a. Net income minus federal tax credits equals federal tax payable. b. Taxable income minus federal tax credits equals total federal income tax. c. Net income minus federal tax credits equals taxable income. d. Total federal income tax minus federal tax credits equals federal income tax payable

##Step 1: Understanding Federal Income Tax Payable<br />###Federal income tax payable is the net amount of income tax owed after all deductions and credits have been applied.<br /><br />##Step 2: Understanding Tax Credits vs. Deductions<br />###Tax credits directly reduce the amount of tax owed, while deductions reduce taxable income.<br /><br />##Step 3: Analyzing the Options<br />###Option (a) is incorrect because net income is not directly used to calculate tax payable. Option (b) is incorrect because it doesn't account for deductions. Option (c) is incorrect because it confuses the roles of credits and deductions. Option (d) correctly states that tax payable is the total tax owed minus any applicable tax credits.<br /><br />#