Planning your finances with respect to your savings and taxes can help you to get more out of your investments, while allowing you to save more in taxes. Most working Americans save for their retirement by making regular contributions to their 401(k) accounts or individual retirement plans. Smart tax planning is about knowing the withdrawal rules for retirement accounts and how to properly time everything.

If you make early withdrawals from your IRA, 401(k) or another individual retirement account, then you are charged additional tax and a penalty of 10%. An early withdrawal is one made before you reach the age of 59 1/2 years. Therefore, if you think that you may need to use some of your savings in the near future, you should not keep them in your retirement account. Making a smaller contribution is better than withdrawing early and suffering a penalty.

You may also want to stay current with any changes in tax laws and retirement policies, as they may impact your finances and planning. For instance, the IRS recently issued a change in the tax rule that allow taxpayers who make large contributions to their 401(k) can use their 401(K) to fund their Roth IRAs. This transfer is free from taxes.