Smart Tax Strategies to Keep More of Your Money
Taxes are an unavoidable part of life, but the amount you owe each year isn’t written in stone. With thoughtful planning and the right strategies, you can reduce your tax exposure, keep more of your income working for you, and build long-term wealth. While tax rules are complex and constantly evolving, a financial advisor can help you implement strategies that fit your overall plan. Here are four smart approaches to consider and revisit each year. Maximizing Tax-Advantaged Accounts One of the most powerful ways to reduce your tax burden is to use tax-advantaged retirement accounts. Contributions to accounts like 401(k)s and IRAs often come with an immediate benefit: lowering your taxable income for the year. For example, if you contribute $20,000 to your 401(k), your taxable income decreases by the same amount, potentially lowering the taxes you owe that year. On top of that, the investments inside these accounts grow tax-deferred, compounding without the drag of annual taxation. If y...
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