What is a good investment that will lower my overall tax burden?

As I contractor, I don't have a 401(k). However, I do make ok money. What I would like to do is find out what options I have to lower my overall tax burden AND contribute to an investment vehicle. I would hate to be taxed twice, and I wish there was something like a 401(k) that I could get into....

I would highly recommend a Roth IRA. The limit is currently $4000 and I believe it goes up to $5000 either next year or the following and the money that goes into this account from your pocket, has already been taxed. So the money you place in this account grows tax-free until you retire at 59 1/2. There are also some options for early withdrawal for a first time home purchase and a few others.

Inside this account, you can purchase many investment vehicles including actual investment real estate when your account grows large enough or stocks, municipal bonds etc. etc. etc. For staring out, you should buy a handful of funds like a small cap fund, large cap fund, an international fund and say a bond fund.

My question would be if you are making six figures or more [$110,000 to be exact], the Roth IRA might not work because there are salary limits. You could then chose a SEP IRA or traditional IRA for your retirement.

If you make under the limit, which I will assume for this question, I would max out the Roth IRA every year and put other monies into a regular brokerage account and buy bonds if you are worried about the tax consequences.

So in short, open a Roth IRA at say Vanguard and send in $333 a month and try to max it out before tax season comes around or if you can, send in $4000 right away to cover your contribution for 2006. You can then buy a handful of select mutual funds inside this account.

To be more specific, you have up until the day you file your taxes in say April of 2007 to fund your contribution for the 2006 year.

If you have more money you want to set aside, you can open an account with Vanguard, Scottrade or sharebuilder.com and place extra funds into a taxable account. Once this account gets funded, you can purchase tax-exempt bonds inside this account.

Make a plan to do this next week and get these two accounts open and funded. It's even easier if you have 'BillPay' through your bank as you can sign-in online and transfer money to these accounts with ease.

You can open a traditional IRA to reduce the tax burden.

Or you can invest in municipal bonds (tax free bonds).

Do you have a house? That will lower your taxes. Talk to an accountant and go read some tax books.

Start your own IRA. Invest in municipal bond funds. The income is tax free. In some states, there are triple tax-free funds; no federal, state or local taxes.

Move to a Third World nation. Then you'll have no tax. Your safety might be compromised, perhaps, but your tax burden will be significantly lower

But if you kinda like having streets, running water, a garbage disposer, a toilet that flushes, and weekly trash pick-up, why not pay your ^&* taxes instead?

We never appreciate what we've got until we walk among people who haven't got those things.

IRA account! You may also look into a SEP. Talk to your banker or tax adviser.

IRAs were designed with folks like you in mind! I found a site that's all about them.
Also there is a provision which allows for Individual 401(k) plans! Do a search for providers as I can't recommend any particular one.
Hope this helps!