It can be tough paying your bills and saving for retirement sometimes. That’s especially true if you’re living in Metro Atlanta or another large city with a relatively high cost of living. However if you meet certain criteria, you may benefit from the IRS Saver’s Credit. If you would like more information on the Atlanta Savers Credit, contact us at 800-871-1219. Here’s how it works.
Do you have an IRA, Roth IRA, 401k, Simple IRA, SARSEP, 403(b), 501(c)(18) or governmental 457(b) plan? Your voluntary after-tax employee contribution may allow you to get a credit on your taxes in 2016 and 2017. WAHOO!
So how do you become eligible for this credit?
- You must be age 18 or older
- Not a full-time student; and
- Cannot be claimed as a dependent on another person’s tax return
The amount of the credit is 50%, 20% or 10% of your retirement plan or IRA contributions up to $2,000 ($4,000 if married filing jointly), depending on your adjusted gross income (reported on your 1040 or 1040A). Check out the chart below to see how much your credit could be.
*Single, married filing separately, or qualifying widow(er)
|
2017 Saver’s Credit |
|||
|
Credit Rate |
Married Filing Jointly |
Head of Household |
All Other Filers* |
|
50% of your contribution |
AGI not more than $37,000 |
AGI not more than $27,750 |
AGI not more than $18,500 |
|
20% of your contribution |
$37,001 – $40,000 |
$27,751 – $30,000 |
$18,501 – $20,000 |
|
10% of your contribution |
$40,001 – $62,000 |
$30,001 – $46,500 |
$20,001 – $31,000 |
|
0% of your contribution |
more than $62,000 |
more than $46,500 |
more than $31,000 |
|
2016 Saver’s Credit |
|||
|
Credit Rate |
Married Filing Jointly |
Head of Household |
All Other Filers* |
|
50% of your contribution |
AGI not more than $37,000 |
AGI not more than $27,750 |
AGI not more than $18,500 |
|
20% of your contribution |
$37,001 – $40,000 |
$27,751 – $30,000 |
$18,501 – $20,000 |
|
10% of your contribution |
$40,001 – $61,500 |
$30,001 – $46,125 |
$20,001 – $30,750 |
|
0% of your contribution |
more than $61,500 |
more than $46,125 |
more than $30,750 |
Basically, the IRS could potentially give YOU money back! That’s extra money to enjoy a Atlanta Braves game or a night out in downtown Atlanta. Putting it in savings to bolster your retirement plan – and take help you take advantage of the credit again next year isn’t a bad idea either.
There are additional limits on who qualifies for the Saver’s Credit, so you should talk with a tax professional to determine your eligibility. If you need help setting up your own IRA or SARSEP, just let us know and we will help you out. Email fsykes@scarletoakfs.com or call 800-871-1219.
