<prompt> Human: My wife and I are 26, we both work, we have a mortgage, no kids, and not much to deduct. Specifically: Description Amount USD :------:My Income 71,570 Wifes Income 15,349 Combined Income86,979Interest Paid 9,575 I figure I have two options here:1. I take the standard deduction of 11,900. That takes me to 75,019, and gives 4,319 of income above the 25 tax bracket of 70,700. It really kills me inside to pay that extra 10 in taxes when I could be putting it to better use, so thats why Im here.2. I findmake more deductions. After the mortgage interest, I would need to reduce my income by an additional 6,644.A few details for your consideration. I contribute 8 max employer match of my salary to a Roth 401k, but I can start a tradition 401k at the start of next quarter. We have a few medical expenses for dental and regular checkups, but not nearly enough to get over the 7.5 hump. Neither of us have either type of IRA yet. We have 30,000 in the bank; 10,000 of that is serving as the emergency fund while Im waiting on the 1-year period on I-bonds.For 2012, is there anyway to do a catch up contribution on a traditional 401k or IRA that didnt exist in 2012? Is it even worth worrying about?For 2013, Ill start a traditional 401k and Roth IRA and follow the traditional advice given here. Since Im unlikely to have enough medical deductions to get over the 7.5 hump, Ive put our yearly average for medical expenses into FLEX. Am I on the correct path for the year?I feel like Ive rambled and jumped around a lot, but hopefully Ive given a clear enough picture that someone could assist me with my questions. Thanks.  <response>: Because of our tax system, you never make less money by being in a higher tax bracket. Only the 4,319 gets taxed at that extra 10. If you want to save 431.90 youll have to find somewhere to deduct 4,319. Throw it in your 401k if youd like. But you really dont have much of a problem here I would think. 