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If you contribute to a retirement program in general it reduces your taxable income currently, this can be either by contributing to an IRA or participating in a retirement plan your employer offers if you claim 0 on your W-4 this means they are withholding the maximum they are allowed on your gross each pay day, which generally means you have more withheld than you will owe when you file your tax return both of these actions will probably result in a higher refund.
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