Monday, June 3, 2013

Saving for Retirement Can Be Rewarding

If you set aside money towards your retirement by contributing to an IRA or an employee sponsored retirement plan such as a 401K, you may be eligible to claim the Retirement Savings Contribution Credit also known as the Saver’s Credit. This credit allows you to make this contribution up to the due date of your tax returns, giving you the flexibility to have your taxes prepared, see how the numbers are looking and make your final contribution for the year. 

Married couples filing jointly can receive a credit of up to $2,000, while individuals may receive a credit of up to $1,000. Some of the criteria that determines eligibility for the credit are as follows:

·         For someone Single, Married Filing Separately, or Qualifying Widow(er), income
cannot be greater than $28,750.

·         For those filing as Head of Household, income cannot exceed $43,125.

·         For couples that Married Filing Jointly, income cannot be greater than $57,500.
In addition, you cannot have been a full-time student during 2012, cannot have been claimed as a dependent on anyone else’s tax return and you must be at least 18 years old. 

It is possible that you may also be eligible for additional tax benefits based on your income level. Often all or part of any contributions to a traditional IRA can be deducted. Check with your tax professional to find out what benefits you may be eligible for.

 

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