• Skip to content
  • Skip to primary sidebar

Header Right

  • Home
  • About
  • Contact

Archives for March 2020

The Saver’s Tax Credit — Can You Benefit?

March 18, 2020 by admin

David C. Huff, CPA, PC - Saver's Tax CreditIt’s not always easy to keep contributing to your employer-provided retirement plan. Bills and unexpected expenses can eat up most of your salary, leaving little for retirement savings. You might be tempted to forget about it until you start earning more money.

But before you stop or cut back (or never start) contributing to your plan, understand that you could be entitled to a federal tax credit called the Retirement Savings Contributions Credit, or Saver’s Credit, if you meet certain income requirements. In effect, the credit repays a percentage of the contributions you make to your 401(k) or other retirement savings plan by reducing your income tax liability for the year. It may be just the thing that enables you to keep participating in your retirement plan or increase your contributions.

What It Is

The credit is a percentage — 50%, 20%, or 10% — of up to $2,000 in qualified retirement savings contributions for a maximum credit of $1,000 (or twice that amount for a married couple filing jointly who each contribute $2,000). The percentage depends on adjusted gross income (AGI) and filing status. The credit is available for contributions to a 401(k), 403(b), governmental 457(b), SIMPLE IRA, or salary reduction SEP as well as for traditional and Roth IRA contributions.

To claim the credit, you must be at least age 18, not claimed as a dependent on another person’s return, and not a full-time student. You will not be able to claim the credit if your AGI exceeds the top of the range for the 10% credit.

 

2019 Tax Credit
50% of Contribution 20% of Contribution 10% of Contribution 0% of Contribution
Tax Filing Status Adjusted Gross Income
Married Filing Jointly $38,500 or less $38,501-$41,500 $41,501-$64,000 > $64,000
Head of Household $28,875 or less $28,876-$31,125 $31,126-$48,000 > $48,000
All other filers* $19,250 or less $19,251-$20,750 $20,751-$32,000 > $32,000

*Single, married filing separately, or qualifying widow(er)

Call us at 770-229-7145 today and start working with a top Snellville CPA firm dedicated to exceptional service.

Source: irs.gov

Filed Under: Individual Tax

Primary Sidebar

Search

Archives

  • February 2023
  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019

Categories

  • Business Best Practices
  • Business Tax
  • Individual Tax
  • QuickBooks
  • Real Estate Tax
  • Uncategorized

Copyright © 2020 · https://www.huff-cpa.com/blog