Ways to Reduce Your Tax Liability

• Tax-Deferred Retirement Savings Accounts
• MTB Tax-Free Mutual Funds

1. Tax-Deferred Retirement Savings Accounts

As you invest for retirement, you can take advantage of tax-deferred investing, which means you pay no federal taxes on your retirement contributions and earnings until withdrawal. Here's how you can put tax-deferred investing to work for you.

• If your employer sponsors a qualified retirement plan like a 401(k) or 403(b), contribute the most that you can afford. It reduces your current tax burden, and tax-deferred earnings grow until withdrawal at retirement. You have many options in which to invest depending on your risk and time horizon. Employers may match contributions up to a certain specified percentage.
• Beyond your employer-sponsored retirement plan, IRAs also give you tax advantages as you invest for retirement.
• Traditional IRAs offer tax-deferred earnings until withdrawal at retirement.
• Roth IRAs can provide tax-deferral now, and tax-free income after you retire.
• SEP and SIMPLE plans offer simple solutions to small business owners and their employees.

This graph is for illustrative purposes only and is not indicative of past or future performance of any particular investment. Actual returns and principal value will fluctuate. Upon withdrawal, taxes and possible penalties would be applied to the tax-deferred amounts shown.

Please Note: Distributions of deductible contributions and earnings from Traditional, Simple and SEP-IRAs are subject to income tax and may be subject to a 10% penalty if received before the age of 59½. Withdrawals from a Roth IRA may be subject to taxes and a 10% IRS penalty unless the IRA has been open for at least 5 years, and: (1) the withdrawal is made after age 59½, (2) the withdrawal is used to pay certain first-time home purchase expenses (up to $10,000), or (3) the withdrawal is made due to the owner's death or disability. Distributions from an Education IRA (Coverdell Education Savings Account) are free of federal taxes if used to pay the beneficiary's qualified education expenses.

Systematic investing does not assure a profit or protect against loss in declining markets.

2. MTB Tax-Free Mutual Funds

An MTB tax-free municipal bond fund or money market fund can be an attractive way to earn monthly or quarterly income free of both federal regular and state income tax.* These funds invest in high quality bonds, notes and commercial paper, specific to state issuers.

As you can see by this example, their double tax-free yields (free from federal and state income tax) can take your money as far or farther than many taxable investments.

Here is an example of a tax-free yield and the taxable-equivalent yield at a hypothetical tax bracket of 42.40%. That 3.00% tax-exempt investment is earning as much as a 5.21% taxable fund investment on an after-tax basis!*

* Yields quoted are for illustrative purposes only and are not representative of any particular investment.

Neither MTB Group of Funds nor any affiliates, agents or representatives are authorized to give legal, tax, estate planning or accounting advice, and this general information is not intended to be considered legal, tax, estate planning or accounting advice. We suggest that you consult your attorney, accountant or tax advisor for such advice on specific points of interest to you.

Tax information contained herein is from sources deemed reliable, but no guarantee is made as to its accuracy or completeness.