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Tax-Reduction Strategies Tax-Qualified Plans The best way to reduce current income taxes, and at the same time plan for retirement, is to contribute to your employer-sponsored tax-qualified plan. If you're in the 25% federal marginal income tax bracket (see Marginal Income Tax Bracket section), each $100 you contribute to your tax-qualified plan saves you 25% or $25 on your tax bills. This means that you're putting away $100 which will grow tax-qualified for your future, and it's really only costing you $75 after taxes! In contributing to your tax-qualified plan, you are also practicing one of the most important habits of sound financial planning: PAY YOURSELF FIRST! < PREVIOUS NEXT > #40101