Credit
In one sentence: A dollar-for-dollar reduction of your tax bill.
What it means
Credits are more valuable than deductions of the same size. A $1,000 credit cuts your tax by $1,000; a $1,000 deduction cuts it by your marginal rate times $1,000.
In one sentence: A dollar-for-dollar reduction of your tax bill.
Credits are more valuable than deductions of the same size. A $1,000 credit cuts your tax by $1,000; a $1,000 deduction cuts it by your marginal rate times $1,000.