Invest Smarter by Paying Less in Taxes

401(k) / 403(b)

$23,500 for 2026 ($31,000 if 50+)

The most common employer-sponsored retirement plan. Contributions are made pre-tax through payroll deductions, reducing your taxable income dollar for dollar. Many employers offer matching contributions — always contribute enough to capture the full match before funding other accounts.

Traditional IRA

$7,000 for 2026 ($8,000 if 50+)

Available to anyone with earned income. Contributions may be fully deductible depending on your income and whether you have a workplace plan. Even if not deductible, the account still grows tax-deferred until withdrawal.

SEP-IRA

Up to 25% of net SE income, max $70,000

Designed for self-employed individuals and small business owners. Allows much higher contribution limits than a traditional IRA. Contributions are fully deductible as a business expense, making this one of the most powerful tax-reduction tools for freelancers and entrepreneurs.

HSA (Health Savings Account)

$4,300 individual / $8,550 family for 2026

The only account with a triple tax advantage: contributions are deductible, growth is tax-free, and withdrawals for qualified medical expenses are tax-free. After age 65, non-medical withdrawals are taxed as income (like a traditional IRA) but with no penalty.

Roth IRA

$7,000 for 2026 ($8,000 if 50+)

Contributions are made with after-tax money, but qualified withdrawals in retirement are completely tax-free — including all investment gains. Income limits apply for direct contributions, but backdoor Roth conversions remain available for higher earners.

Roth 401(k)

$23,500 for 2026 ($31,000 if 50+)

The employer-sponsored Roth option. Same contribution limits as a traditional 401(k) but with after-tax dollars. No income limits apply, unlike Roth IRAs. Ideal if you expect to be in a higher tax bracket in retirement or want tax diversification.

529 Plans

Varies by state; up to $18,000/year per beneficiary gift-tax-free

Tax-free growth for qualified education expenses including tuition, room and board, and up to $10,000 in K-12 tuition per year. Many states offer a state income tax deduction for contributions. Unused funds can now be rolled into a Roth IRA (up to $35,000 lifetime).

Trump Accounts

$5,000 per child at birth (new for 2026)

A new tax-advantaged savings account for children created under the One Big Beautiful Bill. The government seeds each account for newborns, and families can make additional tax-free contributions. Funds can be used for education and first-time home purchases.

Municipal Bonds

Interest from municipal bonds is exempt from federal income tax, and often exempt from state tax if the bond is issued in your state. For investors in high tax brackets, the after-tax yield on munis can exceed that of higher-yielding taxable bonds.

Index Funds

Index funds have very low portfolio turnover compared to actively managed funds, which means fewer taxable capital gains distributions. A broad-market index fund might distribute 0-2% of its value in capital gains annually, while an active fund can distribute 5-10% or more.

Tax-Loss Harvesting

Selling investments at a loss to offset capital gains from winners. You can deduct up to $3,000 in net losses against ordinary income per year, with remaining losses carrying forward indefinitely. This strategy is most effective when done consistently throughout the year.

Asset Location

Place tax-inefficient investments (REITs, high-yield bonds, actively managed funds) in tax-advantaged accounts, and tax-efficient investments (index funds, municipal bonds, long-term stock holdings) in taxable accounts. This simple reallocation can add 0.25-0.75% to annual after-tax returns.

Vanguard

Fidelity

Schwab

Betterment

Wealthfront