Saving money for retirement can be difficult, especially if you don’t have a high income. Fortunately, the IRS offers a tax credit, called the Saver’s Credit, which can help you to save for retirement and keep your tax bill low.
What Is Saver’s Credit?
The Saver’s Credit is a tax credit available to low- and moderate-income workers that allows them to deduct a percentage of the money they save for retirement. This credit is in addition to the tax credit already offered to taxpayers for putting savings into a retirement account. If you qualify for this credit, it could significantly reduce or even eliminate your tax bill.
Who Qualifies for the Credit?
To qualify for the Saver’s Credit, you must have an adjusted gross income of less than $61,500 for married couples who file jointly, $46,125 for those who file as head of household, and $30,750 for other taxpayers. In addition to meeting this income requirement, you cannot be a full-time student or be claimed as a dependent on another person’s tax return. Also, you must have made contributions to a qualifying retirement account in the same tax year for which you are filing your return.
If you’re not sure whether you can claim the Saver’s Credit, get in touch with the tax help pros at Taxation Solutions, Inc. We’ll assess your finances and work hard to help you minimize your tax bill!