Conrad and Jill have a taxable income of $63,670. They discovered that they are able to receive a $1,500 tax credit for purchasing an energy efficient furnace. How will this tax credit affect their taxes?
A. The tax credit will increase their taxable income by $1,500.
B. The tax credit will reduce their taxable income by $1,500.
C. The tax credit is added to the tax owed, not the taxable income.
D. The tax credit is subtracted from the tax owed, not taxable income.
Answer: D
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