I know I could save on taxes by throwing more into 401k, but I was hoping you could get the rate down.

Every dollar you apply to tax-advantaged retirement accounts reduces your effective tax rate. The effective tax rate you calculate is a combination of all the taxes you pay divided into your gross income. Theoretically, it should include all income taxes (city, state, and federal), all payroll taxes (social security, Medicare) all consumption taxes (car tax and boat tax in Virginia, sales tax), fuel taxes (gasoline), sin taxes (liquor and smokes), and all property tax (school, county, fire district, whatever). But that's tough to add up, and most of the online ones just tell you your state, fed and payroll effective tax rates, so let's start there.

Take a look at the 2014 federal tax brackets here:

http://taxfoundation.org/article/2014-tax-brackets. Notice that there are plateaus where the effective rates jump. So if you are Married Filing Jointly (MFJ) and you grossed $120,000, and you had itemized deductions of $20,000 ($12,400 standard deduction plus some schedule A stuff) bringing you to AGI of $100,000, you'd pay taxes like this:

$0 - 18,150 10% = 1,815

$18,150 - 73,800 15% = 8,347.50 (Note you pay 15% on the amount BETWEEN 18150 and 73,800, not the whole thing!)

$73,800 - 100,000 25% = 6,550

Total $16,712.50

Effective tax rate = 16712.50 / 120000 = 13.9%

Works essentially the same way with state taxes, but they have different plateaus/brackets.

Now, here is where the magic happens and how you can lower your effective tax rate. Let's say I decide to contribute $11,000 to my IRAs (assume my wife has one, too). I'm going to realize those tax savings in the 25% bracket. For every four dollars you put in to your retirement, you pay a dollar less in taxes. This lowers your effective tax rate:

$0 - 18,150 10% = 1,815

$18,150 - 73,800 15% = 8,347.50 (Note you pay 15% on the amount BETWEEN 18150 and 73,800, not the whole thing!)

$73,800 - 89,000 25% = 3,800 (net savings $2750, or 25% of 11k)

Total $13,962.50

Effective tax rate = 16712.50 / 120000 = 11.6%

This proof of concept works for any reduction amount down to an effective tax rate of zero. The higher your bracket, the more effective deductions are.