Which of the following currently reduces taxes?
1. contributions to an IRA
2. contributions to a Roth account
3. purchases of life insurance
4. contributions to a 401(k)plan
A)1 and 2
B)1 and 3
C)1 and 4
D)2 and 4

Question

Quizplus · Accepted Answer

Contributions to a traditional IRA and a 401(k) plan can reduce taxable income in the year the contributions are made, thus reducing taxes. Contributions to a Roth account are made with after-tax dollars and do not reduce current taxable income. Life insurance premiums are not deductible for personal income tax purposes.

Which of the Following Currently Reduces Taxes