Tax-Advantaged Accounts

The tax code offers several legal ways to cut your bill. These aren't loopholes — they're built-in incentives:

• 401(k) / Traditional IRA: Deduct contributions now, pay taxes in retirement
• Roth IRA / 401(k): Pay taxes now, never pay again on the growth
• HSA: Triple benefit — deductible, grows tax-free, tax-free for medical costs
• 529 plans: Tax-free growth for education expenses
• FSA: Pre-tax dollars for medical and dependent-care costs

Maxing out these accounts is the single most powerful tax move for most people. Someone putting $23,500 into a 401(k) in the 24% bracket saves $5,640 in taxes that year alone.