Be the Retiring Type
A variety of financial vehicles can help employees meet their goals and reduce current taxes. Start by contributing the maximum to a qualified retirement plan.
Contribute up to $18,000 annually to a 401(k), 403(b) and most 457 plans, plus an extra $6,000 annually if you’re aged 50 or older.
Put up to $5,500 annually into a traditional IRA and another $1,000 if you’re aged 50 or over. Income limits apply.
Have a defined benefit pension? The limitation on the annual benefit under a defined benefit plan under Section 415(b)(1)(A) in 2017 is $215,000.
No Taxes Later
If you don’t want to depend on future tax rates, why not contribute to a Roth IRA with its tax-free distributions? The income phase-out range for heads of households and single taxpayers to make contributions is $118,000 to $133,000. For married couples filing jointly, the income phase-out range is $186,000 to $196,000.
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