Contributing to a traditionalindividual retirement account (IRA)is another effective way to reduce taxable income. For 2024 and 2025, the contribution limit is $7,000, with a catch-up provision of an additional
Most of us invest in a 401(k) or similar savings plan because we want to enjoy a comfortable retirement. But there are short-term benefits, too. Contributions are excluded from taxable income—a lucrative break that helps make saving less painful (and doesn’t require the servic...
You might decide to contribute your tax refund to a retirement account, and you can also open retirement accounts that allow you to reduce your taxable income either now or take withdrawals tax-free in retirement. You may try one strategy or two to save more and find that you enjoy the ...
Resist temptation to book a vacation with yourrefundand tackle that debt instead. Start with debts with the highest interest rates; eliminating these will save you the most money in the long run. If you don't have any credit card debt, use your tax refund to reduce your car or student ...
Moving to a lower-tax state can also be an effective way to lower taxes. 1. Know What’s Taxable Just about everything is taxable. The question is, when is it taxable? If you have investments outside oftax-advantagedretirement accounts, they’re taxable each year, whether you are retire...
Deferring income from the current year into the next can reduce the current year's taxable income and let you delay paying taxes on the deferred income. You can contribute to an IRA all the way until tax filing day and still deduct the eligible amount from your taxable inc...
If you’re looking to ease into retirement, some good-paying jobs can be done on a part-time basis. Maryalene LaPonsieApril 2, 2025 What to Expect From Social Security Here's how to estimate your monthly Social Security income in retirement. ...
To put the cherry on the cake,the benefit is not taxable! New payment amounts and income adjustments get made in July every year. If your family net income is under $34,863, you would qualify for the maximum. Above that and your family will start to receive reduced benefits. Then there...
Another way to increase your tax refund while saving money long-term is to maximize retirement contributions. By putting money into an account such as a401(k)orindividual retirement account (IRA)you can reduce your taxable income while growing your retirement portfolio. ...
If you can’t afford to max out your account, at least contribute enough to get any matching funds your employer offers because that is free money. Your 401k contributions are pre-tax, so the more money you contribute, the more you’ll reduce your taxable income. ...