Maximizing Savings: Understanding Tax Deductions vs. Tax Credits

Dr Friday Tax Tips - One Minute Moment
Dr. Friday Tax Tips
Maximizing Savings: Understanding Tax Deductions vs. Tax Credits

In this Dr. Friday Tax Tips – One Minute Moment, Dr. Friday demystifies the difference between tax deductions and tax credits, crucial for effective tax planning. Tax deductions reduce your taxable income based on your tax bracket, offering proportional savings. For instance, a $1,000 deduction in a 20% tax bracket saves you $200. On the other hand, tax credits directly reduce your tax bill dollar-for-dollar, making them highly valuable. Dr. Friday emphasizes the strategy of prioritizing tax credits to maximize savings before leveraging deductions. This insightful session underscores the importance of understanding these tax elements to optimize your tax payments. Tune into Dr. Friday’s call-in show every Saturday from 2 to 3 p.m. on 99.7 WTN for more tax advice.


G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial firm. To get more info, go to This is a one-minute moment.

What is a tax deduction? You guys always hear me talking about tax credits, tax deductions, and you really kind of need to understand the difference, right? Tax deductions are good. It’s gonna reduce your tax based on your tax bracket. So if you get a thousand dollar tax deduction and you’re in the 20% tax bracket, you’re gonna save $200. Tax credits are awesome. If you’re gonna get a tax credit for a thousand dollars, you’re going to save a thousand dollars. So what we really want to do is chase all the tax credits first, then maximize our tax deductions, and then we’ll pay our taxes. Talk to you later.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.