Tuesday, March 22, 2016

Save on Your Taxes and for Retirement with the Saver’s Credit
If you contribute to a retirement plan, like a 401(k) or an IRA, you may be able to claim the Saver’s Credit. This credit can help you save for retirement and reduce the tax you owe. Here are some key facts that you should know about this important tax credit:
  • Formal Name.  The formal name of the Saver’s Credit is the Retirement Savings Contribution Credit. The Saver’s Credit is in addition to other tax savings you get if you set aside money for retirement. For example, you may also be able to deduct your contributions to a traditional IRA.
  • Maximum Credit.  The Saver’s Credit is worth up to $4,000 if you are married and file a joint return. The credit is worth up to $2,000 if you are single. The credit you receive is often much less than the maximum. This is partly because of the deductions and other credits you may claim.
  • Income Limits.  You may be able to claim the credit depending on your filing status and the amount of your yearly income. You may be eligible for the credit on your 2015 tax return if you are:
    • Married filing jointly with income up to $61,000
    • Head of household with income up to $45,750
    • Married filing separately or a single taxpayer with income up to $30,500
  • Other Rules.  Other 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 2015.
    • No other person can claim you as a dependent on their tax return.
  • Contribution Date.  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 2015. The due date for most people is April 18, 2016.
  • Form 8880.  File Form 8880, Credit for Qualified Retirement Savings Contributions, to claim the credit.
  • Free File.  If you can claim the credit, you can prepare and e-file your tax return for free using IRS Free File. The tax software will do the hard work for you. It will do the math and complete the right forms. Free File is available only through the IRS.gov website.
Use the Interactive Tax Assistant interview tool to help you determine if you qualify to claim the Retirement Savings Contributions Credit.
Each and every taxpayer has a set of fundamental rights they should be aware of when dealing with the IRS. These are your Taxpayer Bill of Rights. Explore your rights and our obligations to protect them on IRS.gov.


  1. I like the details you have shared. Your post is really very informative and helpful.

    CPA Accounting Firm Olney

  2. Nice reading, I love your content. This is really a fantastic and informative post. Keep it up and if you are looking for Personal Tax Accountant Near Me then visit Gordon Frasier CPA & Company Inc..

  3. You have shared a nice article here about the tax saving. Your article is very informative and useful for those who are interested to know more about the process of tax saving. Thank you for sharing this article here. Farm & Ranch Tax Professionals

  4. This comment has been removed by the author.

  5. I was very impressed by this post, this site has always been pleasant news about tax saving. you very much for such an interesting post, thanks for these type of informative content. File Taxes Online Canada

  6. You are sharing a piece of nice information, it helped me. Keep it up and in the future sharing more articles like this. It was awesome article to read. Complete rich content and fully informative. Thanks for this message. Best Agricultural Management Consultants.

  7. It was awesome article to read. Your article is very informative and I liked your way to express your views in this post. Very well written article. Thanks for sharing this article here. Santa Barbara CPA.

  8. Many people find it difficult to consistently save the money required to fill their retirement savings accounts. The retirement savings contribution credit, a non-refundable tax credit, can fortunately make saving a lot simpler. It enables people and families with modest incomes to benefit from tax reductions in addition to whatever deductions they may obtain from contributions to their individual retirement accounts (IRAs) or employer-sponsored plans. Typically referred to as the saver's tax credit. The credit balances the cost of funding a retirement account by lowering the individual's yearly income tax, thereby increasing their long-term savings over time.

    smsf tax accounting