I'm a Tax Expert, and These Are the Tax Breaks My Clients Confuse Most Often

Time for pop quiz. Do tax credits or deductions save you more money? And now, what is the difference between exemptions and exclusions? If you're stumbling for an explanation, it's understandable, given all the jargon tossed around during tax season. As an IRS-enrolled agent, I know firsthand that understanding these terms can help you keep more of your hard-earned money. I'll explain these commonly confused tax breaks, provide examples and share strategies for maximizing your tax savings. Read more: Tax Season 2025 Cheat Sheet: Make Filing Your Taxes Simple With This Tool What is the difference between tax credits and deductions? These two tax terms are probably the ones my clients confuse most often. Think of a tax credit as a gift card applied to your tax bill at checkout and a tax deduction as a discount on your taxable income. Both are valuable, but credits tend to be far more impactful. Let's look at an example to help explain. Say you're a single filer who earned $50,000 i ... Read full article.