2. Not Maximizing Your Retirement Plan Contributions.
Whether it is a 401(k) plan, SEP plan or individual IRA, all taxpayers should take a look to see the advantages of using any tax deferred saving vehicles available to them for tax reduction strategies.
Remember, not all retirement contributions are deductible. For example, you wont get any tax break for a contribution to a Roth IRA, but your investment can accumulate tax-free and your earning and contribution withdrawals can be accessed tax free if you’ve had the account for at least five years and the distribution is made after you’ve reached age 59½. This can be a very strong strategy that should be considered by all taxpayers.