It’s almost year-end, but there’s still time. Dr. Friday explains how boosting your 401(k) or IRA contribution can lower your taxable income.
Transcript
G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.
And we probably are pushing it close, but for all of you that are employees that have 401(k)s and you’re sitting there thinking, “Wow, my income may just be a little higher. I can afford to put a little bit more.”
Maybe you need to think of taking that last paycheck that may be coming up here and giving more of it to your 401(k). It will save more money today—well, I should say it will reduce your income. And then obviously later you’ll have to pay taxes, but you know, it’s a 401(k). That’s what we do.
So think about doing that. And of course, it doesn’t hurt if you have IRAs or Roth IRAs. Those are all tax-related decisions. Talk to your financial planner, see what works out best for you.
But from a tax standpoint, reducing your income always saves us tax dollars.
You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.