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How do tax credits differ from tax deductions? The benefit of tax deductions is capped by the taxpayer's available standard deduction, but the benefit of

How do tax credits differ from tax deductions?

The benefit of tax deductions is capped by the taxpayer's available standard deduction, but the benefit of tax credits is unlimited.

Tax credits and tax deductions operate similarly.

A tax credit is a dollar-for-dollar reduction in tax liability, whereas a tax deduction reduces taxable income.

Tax credits are benefits targeted toward businesses, whereas tax deductions are benefits targeted toward families.

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