Contributing to retirement accounts, such as a 401(k) or an IRA, offers dual benefits: securing your financial future and reducing your taxable income.
The funds you contribute to these accounts are often tax-deferred, meaning they won’t be taxed until you withdraw them during retirement.
This decreases your current taxable income, potentially placing you in a lower tax bracket. When your itemized deductions exceed the standard deduction, itemizing becomes a viable option.