Retirement contributions are a superb way to lower your overall taxable income.  Here's how it breaks down:  If you have a 401k, you are allowed to contribute amounts up to $18,000.  If you're over the age of 50 (or turning 50 this year), you can contribute a total of $24,000 to your 401k.  For those with SIMPLE 401k plans, you're capped at $12,500 in contributions, or $15,500 for those 50 or older.