How to Maximize Your Savings Under the New Tax Law

After much anticipation, the Internal Revenue Service in December announced revisions to the U.S. tax law, including some major changes for those filing individually. While these changes won't affect the way you file this tax season, you should be aware of a few notable adjustments to the law that could benefit you in the year ahead.

Here are a couple of things to keep in mind.

Use tax-favored accounts to the fullest. One of the more imminent and noticeable changes is that many working Americans could see a bump in their income as their employers start using the new IRS income tax withholding tables. This is because the new tables may reduce the federal tax withheld from one's take-home pay.

If you find yourself with more money in your paycheck, you could use those extra funds to boost your savings. For example, you might consider increasing contributions to your 401(k) or other employer-sponsored retirement plan. Or, as the tax cuts lower tax brackets through 2025, you could put your additional take-home pay toward a tax-advantaged traditional individual retirement account.


Source: Yahoo News