Q&A of the Week October 2, 2024

Question

How important is it to contribute to a 401(k) or IRA?

Answer

These contributions can reduce your taxable income, meaning you'll owe less in taxes this year. Plus, your investments can grow tax-free or tax-deferred, depending on the type of account.

If you're a student, you can also consider taking advantage of education tax credits, like the American Opportunity Tax Credit (AOTC), which can help reduce your tax liability if you're paying for tuition or other educational expenses.

Talk more about options with a tax professional!