Your contributions to your retirement account may cost you less than you think.
Individuals whose adjusted gross incomes (AGI) are below certain amounts are eligible to receive a nonrefundable tax credit of 50% of their contributions, up to a dollar limit of $1,000. This means that the cost of funding your IRA, and/or making salary deferral contributions to a 401(k), 403(b) or 457(b) plan can be reduced by as much as $1,000.
This nonrefundable tax credit is called the Saver’s Credit. Click here to see the AGI limits that apply to the previous and current calendar years.
Since this is a nonrefundable tax credit, the only way to benefit from it is to fund your retirement account.
See the article The Saver’s Credit- an Often Overlooked Retirement Savings Benefit for details on this provision.
Please share this information with someone who can benefit from this nonrefundable tax credit.
Tip provided byAppleby Retirement Consulting Inc. Appleby Retirement Consulting Inc provides Consulting, Coaching and Content on IRAs and other retirement plans to Financial, Tax and Legal professionals.
