What are tax deductions?

Tax deductions enable you to reduce your taxable income. Each year, you can take the standard deduction or itemize your deductions. You may also be able to take above-the-line deductions, which don't require itemizing.

Do tax deductions reduce taxable income?

Remember, tax deductions only reduce taxable income. The good news is you don’t have to choose between tax deductions or credits. If eligible, you can receive both tax credits and deductions to help lower your overall tax obligation. There are several tax credits available to you if you qualify, ranging from education to energy-saving items.

What are tax deductions & tax credits?

Tax deductions lower your taxable income — how much of your income you actually pay tax on — while tax credits are a dollar-for-dollar reduction to your tax bill. Knowing which deductions or credits to claim is challenging, so we created this handy list of 49 tax deductions and tax credits to take this year. Ready to shop for life insurance? 1.