We all know that saving for retirement is something we should do, but it can be hard to think ahead and put money away for the future when you’re in the middle of dealing with today’s expenses. However, putting money into a qualified retirement plan can earn you a sizeable tax credit, meaning that you get the best of both worlds—you save for tomorrow and get money back today!
Known as the “Saver’s Credit,” this tax credit is designed to encourage more people to set money aside for retirement. To qualify, you must:
- Be 18 years of age or older
- NOT be a full-time student
- NOT be claimed as a dependent on another person’s tax return
Taxpayers who meet these criteria can earn a tax credit of up to 50% of their contribution to a qualifying account, such as an Individual Retirement Account (IRA), a Roth IRA, or a 401(k). That means that if you set aside $2,000 for retirement, you could get up to a $1,000 tax credit!
There are various parameters to the Saver’s Credit that affect eligibility, such as your adjusted gross income and your filing status. Taxation Solutions, Inc. is here to help you navigate the tax code so you can make informed financial decisions and take advantage of any and all tax credits you may be eligible to claim.
If you live in the Charlotte area, give the experts at Taxation Solutions, Inc. a call to find out if you can benefit from the Saver’s Credit. We’re here to help you maximize your tax savings today while you plan for tomorrow.