“The answer is ‘yes’. Retirement fund contributions can help to reduce your tax bill in more ways than one,” Furman says.
1. Reduce your tax bill this year and in future years while you earn. “Contributing in excess of the maximum annual amount can benefit you in future years. This is because excess contributions carry over to the following tax year and may reduce your taxable income during the next tax year, even if you don’t make any new contributions in that year.