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By Rachel Haig | 12-17-2009 11:50 AM

Minimize the Tax Blow

Morningstar's Christine Benz on maximizing the benefit of 401(k), IRA, and charitable contributions.

Rachel Haig: Tax season is quickly approaching. Morningstar's director of personal finance, Christine Benz, is here with me to give you some tips on moves you can make to save money later. Thanks for joining me, Christine.

Christine Benz: Hi Rachel. Nice to be here.

Haig: So, typically, one of the first things you hear when you're talking about minimizing taxes is making sure you max out your 401(k) contribution. So, what should investors be thinking about right now with that?

Benz: Well, you should check your latest pay statement. It should say how much you've contributed to your plan for the year to date. And it is a great strategy, if you have the income to do so, to contribute the max. So, for 2009, its $16, 500 if you're under age 50, $22,000 if you're over age 50. So check and see how you're doing on that contribution. And again, if you're in the position to do this, you may be able to steer a higher percentage of your paycheck into that 401(k) to get that balance up for the year.

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