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Tax Tip: Save More for Retirement and Cut Your Tax Bill

Jupiterimages/Thinkstock(NEW YORK) -- Want some good advice on building your retirement nest egg?

"Max out on your 401(k) if it's at possible," suggests tax accountant Janice Hayman.

"That contribution has increased for 2013.  Now it's up to $17,500 and if you're over 50, a full $23,000," she says.

The top limit for Individual Retirement Accounts -- or IRAs -- has also been raised.

"In 2012, they were $5,000 and they're going up to $5,500," says Hayman.  If you're over 50, the tax deductible contribution limit is even higher.

Adding more to these retirement funds can help you cut your tax bill this year.

"If you contribute to your individual retirement account before April 15, for many taxpayers you get to actually reduce your income by that amount," says Bob Meighan of TurboTax.

By acting now, you can reduce your tax liability for 2012.

Copyright 2013 ABC News Radio

ABC News Radio