![]() However, the amount of the eligible credit begins to be reduced as your income increases. The credit you obtain may be less because of your deductions and other credits claimed. The maximum credit is $1,000 for single filers or $2,000 for married couples. Rollover retirement contributions are not eligible. With the Saver’s Credit, you can offset part of the first $2,000 you contribute to your retirement plan ($4,000 if you file jointly with your spouse) through: This credit offers an incentive to build a nest egg you can use upon retirement. Save for Retirement Through the Saver’s Credit In fact, a recent survey conducted by Transamerica Center for Retirement Studies revealed just one quarter of Americans with an annual household income of less than $50,000 are aware of the credit. Many people don’t take advantage of the credit simply because they don’t know anything about it. ![]() To help determine eligibility, use the help of a tax professional at H&R Block. You can’t file Form 8880 using a 1040EZ, so it’s important to consult an expert to make sure you are eligible for the credit. It is a non-refundable credit, meaning it can reduce the tax you owe to zero, but it can’t provide you with a tax refund. The Retirement Savings Contributions Credit or “Saver’s Credit” allows you to save money for your retirement, while also offering a tax credit, thus reducing – or in some cases even eliminating – your overall tax amount owed. Remember: You can’t file Form 8880 using a 1040EZ, so it’s important to consult an expert to make sure you are eligible for the credit. Editor’s Note: This post discusses the Saver’s Credit, a special tax break to low- and moderate-income American taxpayers saving for retirement.
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