JotikaT2
Employee Tax Expert

Deductions & credits

These are two different items on your return.  

 

Residential Energy Credits are used to offset any tax liability dollar for dollar.  For example, if you owe $500 in tax, but you have a credit of $400, your tax due will be reduced to $100 ($500-$400).

 

The standard deduction is used as a deduction to reduce your taxable income.  Your taxable income is used to calculate your total tax liability based upon your tax rate.

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