Tax-sheltered retirement accounts allow a certain portion of your income to remain exempt from income taxes for the current year.

Question

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Tax-sheltered retirement accounts, such as 401(k)s and IRAs, offer tax benefits by allowing individuals to contribute pre-tax income, which reduces their taxable income for the current year. This means that a certain portion of the income remains exempt from income taxes.

Tax-Sheltered Retirement Accounts Allow a Certain Portion of Your Income