Will the government help me save for retirement?
Good news! You may be able to claim the Retirement Savings Contribution Credit to save money as part of your retirement planning. This credit adds to other savings, such as the credit you receive for contributing to a traditional IRA.Income limits exist on claiming this credit. Household income must remain below:
- $60,000 for married taxpayers filing jointly,
- $45,000 for head of household, or
- $30,000 for single or married filing separately.
The maximum credit available is $2,000 ($1,000 for single taxpayers).Other rules that apply include:
- Taxpayers must be at least 18 years old.
- Taxpayers can’t be claimed as a dependent on another person’s return.
- Taxpayers can’t be full-time students during the year they wish to claim the credit.
- 401k contributions must be made during the taxable calendar year. IRA contributions may generally be made by April 15, when the tax return is due.
Claim your Savings Credit on Form 8880.If your income exceeds the maximum allowable and you need other tax and retirement planning ideas, contact the tax accountant team at Patrick & Robinson CPAs: Office@CPAsite.com or 904-396-5400.
