If you contribute to a retirement plan, like a 401(k) or an IRA, you may be eligible for the Saver's Credit. The Saver’s Credit can help you save for retirement and reduce the tax you owe. Here are five facts from the IRS that you should know about this credit:
- The Saver’s Credit
is the short name for the Retirement Savings Contribution Credit. It
can be worth up to $2,000 for married couples filing a joint return. The
credit is worth up to $1,000 for single taxpayers.
- Eligibility depends on your filing
status and the amount of your yearly income. You may be eligible for the
credit on your 2013 tax return if you’re:
- Married filing separately or a single taxpayer with income up to $29,500
- Head of household with income up to $44,250
- Married filing jointly with income up to $59,000
- Other special rules that apply to the credit include:
- You must be at least 18 years of age.
- You can’t have been a full-time student in 2013.
- You can’t be claimed as a dependent on another person’s tax return.
- You must have contributed to a 401(k)
plan or similar workplace plan by the end of the year to claim this
credit. However, you can contribute to an IRA by the due date of your
tax return and still have it count for 2013. The due date for most
people is April 15, 2014.
- File Form 8880, Credit for Qualified Retirement Savings Contributions, to claim the credit. Tax software will do this for you if you e-file.
Visit IRS.gov for more information about this important tax credit.
Circular 230 Disclosure
Pursuant to the requirements of the Internal Revenue Service Circular 230, we inform you that, to the extent any advice relating to a Federal tax issue is contained in this communication, including in any attachments, it was not written or intended to be used, and cannot be used, for the purpose of (a) avoiding any tax related penalties that may be imposed on you or any other person under the Internal Revenue Code, or (b) promoting, marketing or recommending to another person any transaction or matter addressed in this communication
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