Showing posts with label lower your tax bill. Show all posts
Showing posts with label lower your tax bill. Show all posts

Friday, August 26, 2016

Saving for Retirement can Equal a Lower Tax Bill

English: ceramic piggy bank
Saving for retirement is something that everyone should do, for their own sake. If you need an extra little push to get started on your retirement savings- and remember it’s never too late to start- or to up your savings, then you should know that saving for retirement can actually lower your tax bill!

Contribute to Your 401(k)

To start out with, if you don’t already have a 401(k) through your workplace and one is available, take advantage of it immediately! Otherwise, you are missing out on easy and even free money that could be put toward your retirement.

Then, when possible, put the maximum amount allowed in your 401(k). If you’re lucky, this could even put you into a lower and, thus, lower-taxed income bracket, but either way,  since contributions to your 401(k) are tax-deductible, you’ll lower the amount of taxed income you have and, thus, how much you have to pay.

Plus, of course, you actually WILL be saving for retirement in the process, which is always a good thing.

Contribute to Your SEP-IRA

Working for yourself absolutely does not mean that you can’t save for the future while also saving in the present. If you own your own business or are otherwise self-employed, you can usually open an SEP-IRA and then contribute to it tax-free, thus lowering your taxable income, even without the help of a standard employer.


These are just a couple of options you have for saving for retirement while also giving yourself a nice little tax break. If you want to discover more ways to lower your tax bill and plan for your future, be sure to talk with your accountant about your options.