The Best Income tax Tip for most people

The best income tax tip for most people is to maximize your 401(k) deductions.

 

 The deductions lower your taxable income and all earnings are tax-deferred until distributions are received after your retirement.

If your employer offers a matching contribution, you have an immediate tax-deferred return on investment as well as a reduction of your wages on your W-2.

In addition the money that your employer makes as a voluntary contribution is usually exempt from Fica taxes (a major savings).

 

Another benefit to consider is that any money in your 401(k) account is protected by law against creditors.

 

 So if you are ever hit by a lawsuit or have to file bankruptcy, your 401(k) money is safe.

 

CAUTION: IRAs do not have the same protection against creditors that 401(k) plans have.

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If you want the best in tax advice please see my blog at

LarryLaveTaxman@blogspot.com or email me

LarryLaveTaxman@gmail.com