taxes

Tax planning 2011: Smart moves to make now

Boost retirement savings
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Boost retirement savings

The best gift you can give yourself this coming holiday season is adding to your retirement savings. Not only will it help ensure you can enjoy your post-work years, retirement plan contributions could cut your current tax bill.

Money placed in a traditional IRA, for example, could provide a deduction on your upcoming tax return.

Increased contributions to your workplace 401(k) plan through the rest of the year will reduce your taxable income amount since the contributions are automatically taken out of your pay before payroll and income taxes are calculated.

Be sure to take full advantage of your employer's matching contribution amount. That's free money that can really add up.

And even if there's no immediate tax savings because you're not eligible for a traditional IRA deduction or you have a Roth IRA, contributing now is still a good idea. The sooner you add money to your retirement accounts, the longer the earnings can compound.


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