Home Invites Members Groups Events Careers Videos News Photos Blogs Polls Singles Forums Chat
Home > Graduate School Info > Post Content

The Savers Tax Credit Explained (1522 hits)

by Roderick Kelly

A little known tax credit can help you save for retirement, even if you feel you donít have the money to do so.

The formal name is the Retirement Savings Contributions Credit. Most people, however, know it simply as the Saverís Credit, a two-timing savings strategy that reduces taxes and increases retirement.

By the numbers, here is how the Saverís Credit works: Letís say you pay yourself $2,000 in a qualified retirement plan, such as an IRA or 401(k). If your adjusted gross income is within a certain range (see chart below), the IRS allows you to receive a tax credit up to 50 percent of that contribution or, in this example, $1,000.

Say it ainít so, Joe.

Itís true. In essence, you get paid for paying yourself.

Savers Tax Credit Eligibility

In order to receive the tax credit, you do need to meet certain requirements.
ēAge 18 or older
ēNot being claimed as a dependent on another personís return
ēNot a full-time student
ēAdjusted gross income (AGI) does not exceed $61,500 if filing jointly; $46,125 if filing as head of household or $30,750 for all other filers

What is the AGI?

Your AGI is your total gross income minus specific deductions, which are subject to change each year. But some deductions have been allowed each year including: half of the self-employment taxes you may pay, alimony payments, tuition and fees and contributions to certain retirement accounts such as a traditional IRA. Consult with a tax professional to find out all the deductions allowed in 2016.

The 1040 form is the only one that allows you to deduct every possible adjustment. Using form 1040A significantly reduces the number of available adjustments you can take1, according to TurboTax. If you file taxes using the1040EZ form, your AGI equals your total income.

More: http://www.getrichslowly.org/blog/2016/11/02/savers-tax-credit-explained/
Posted By: Elly Moss
Tuesday, December 6th 2016 at 2:22PM
You can also click here to view all posts by this author...

Report obscenity | post comment
Share |
Please Login To Post Comments...

More From This Author
Urban One Founder Cathy Hughes Inducted Into NAB Broadcasting Hall of Fame
Are you ready to answer the call?
Eating Seasonally
Howard releases 2019 football schedule featuring Harvard on the road
Beyoncť Comes Home To Netflix
Spelman College Wins 30th Annual Honda Campus All-Star Challenge (HCASC)
'Save HBCU' event set for Thursday
HBCU Grad Returns with First Ever Adult Coloring Book Celebrating Black Colleges
Forward This Post Entry!
Graduate School Info Home

(Advertise Here)
Who's Online
>> more | invite 
Latest Photos
>> more | add
Most Popular Bloggers
elly moss has logged 103796 blog subscribers!
agnes levine has logged 51439 blog subscribers!
gregory boulware, esq. has logged 17415 blog subscribers!
min sammy jackson has logged 6297 blog subscribers!
robert walker has logged 2170 blog subscribers!
>> more | add