What reduces your tax liability,dollar-for-dollar?

Question

Quizplus · Accepted Answer

A tax credit reduces your tax liability dollar-for-dollar, meaning that the credit amount reduces your tax liability by the exact same amount. Deductions, on the other hand, reduce your taxable income, which then reduces your tax liability based on your tax bracket. Exemptions were eliminated by the Tax Cuts and Jobs Act of 2017, so they are no longer an option for reducing tax liability. Therefore, tax credits are the best choice for reducing tax liability.

What Reduces Your Tax Liability,dollar-For-Dollar