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What I am about to suggest may seem illogical, but it may be best for you at this time.

Your real issue isn't how to reduce taxes, but how to get your income to go further. Your most immediate concern is the reduction of your large debt load.

If your employers do not provide matching funds for your 401(K) plans then I would stop contributing to them. If they do provide matching funds, only contribute as much as you need to get the maximum match. I would also not contribute to any IRA plan. 401(K)s and IRAs are great for building retirement assets, but for every pre-tax dollar you contribute to one of these plans, you will only get back $.28-.41 in reduced taxes ($.28 in income tax, $.00-.08 in social security/medicare, $.00-.05 in NJ state income tax). Retirement plans cost you real money now for the promise of future benefits.


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