Which of the following is NOT a way to reduce taxable income?

Reducing deductions is indeed not a way to reduce taxable income. Deductions decrease the amount of income that is subject to taxation; therefore, if someone reduces their deductions, their taxable income would actually increase.

In contrast, increasing deductions—such as by itemizing expenses or contributing to retirement accounts—directly lowers taxable income. Similarly, investing in tax-advantaged accounts such as Roth IRAs or 401(k)s allows individuals to earn money in ways that are not taxed or are taxed at a lower rate, again reducing taxable income. Lastly, claiming tax credits provides a dollar-for-dollar reduction of tax owed, which can also effectively lower a person’s overall tax liability but does not directly lower taxable income in the same manner as deductions.

Thus, the correct understanding of how taxable income can be managed shows that reducing deductions would not help in minimizing tax liability, making it an inaccurate method for that purpose.