It is important to understand that a tax credit reduces your tax bill on a dollar - for - dollar basis, whereas a deduction only reduces your taxable income. (turbotax.intuit.com)
This strategy, called tax - loss harvesting, involves selling stocks, bonds, and mutual funds that have lost value to help reduce taxes on realized capital gains from winning investments. (fidelity.com)
Credits offer a tax benefit by reducing your tax liability on a dollar - for - dollar basis. (us.etrade.com)