This Could Be the Best Tax Decision You Make All Year

Now that tax season is officially underway, millions of working Americans will soon start gathering paperwork and reading up on ways to shield their income from the IRS. And there are plenty of valuable tax credits and deductions that can help you accomplish the latter. But if your goal is to save money on taxes, perhaps the single best way to get there is to make the one move that will also set you up for a financially secure future: contribute to a traditional retirement savings plan.

IRAs and 401(k)s come in two main varieties: traditional and Roth. With a traditional IRA or 401(k), funds go in on a pre-tax basis, grow tax-deferred, and are only taxed once removed. With a Roth, funds go in on an after-tax basis, but then grow tax-free, and withdrawals are tax-free as well.

Image source: Getty Images.

Continue reading

Source Fool.com