Looking for Hidden Treasure? Learn How to Get the Government to Pay You to Save!
Did you know that the mere act of contributing to a Traditional IRA or Roth IRA may qualify you for the "Saver's Credit" (formerly known as the "Retirement Savings Contribution Credit") and up to $1000 dollars ($2000 if you are married) in cold hard cash?
Here are the rules to get at least a piece of this credit:
1. You must not make more than $27,750 if you are a single filer. If you are married, your combined income must not exceed $55,500.
2. To be eligible for this credit, you must be born before January 2, 1992, you cant be a full time student, and no one else can be claiming you as dependent.
3. The credit is figured as a percentage of the amount you save. To figure this out specifically, take a look at the tax table provided by Tax Policy Center.
4. If you took withdrawals from a retirement plan, your credit may be limited.
5. The Savers Credit will not impact your ability to receive a regular tax deduction. In other words, the Savers Credit is offered, in addition to, other tax benefits of retirement plan contributions.
6. If you do your taxes yourself, download IRS form 8880 to figure and collect your credit.
The Saver's Credit is quite often overlooked by people who qualify. The net effect of this benefit is to have the government fund a significant piece of your retirement and who wouldnt want the government to fund their retirement? :)