Post your resume to over 75 sites today 3 more ways to enjoy The Quarter Roll:
1. New posts via our RSS feed.
2. Get fun financial trivia via Twitter.
3. Subscribe to the free digital issue.
 

The Quarter Roll is the only magazine that brings your Financial Entertainment! Get your FREE digital or print copy today!

 
From the July / August 2011 issue of The Quarter Roll

Are you a saver? Then get credit!
You may be eligible for a tax credit if you make eligible contributions to an employer-sponsored retirement plan or to an individual retirement arrangement. Here’s what the IRS wants you to know about the “Saver’s Credit”:
Income Limits. The Savers Credit, formally known as the Retirement Savings Contributions Credit, applies to individuals with a filing status and income of:

• Single, married filing separately, or qualifying widow(er), with income up to $27,750

• Head of Household with income up to $41,625

• Married Filing Jointly, with incomes up to $55,500

Eligibility requirements. To be eligible for the credit you must have been born before January 2, 1993, you cannot have been a full-time student during the calendar year and cannot be claimed as a dependent on another person’s return.
Credit amount. If you make eligible contributions to a qualified IRA, 401(k) and certain other retirement plans, you may be able to take a credit of up to $1,000 or up to $2,000 if filing jointly. The credit is a percentage of the qualifying contribution amount, with the highest rate for taxpayers with the least income.


Distributions. When figuring this credit, you generally must subtract the amount of distributions you have received from your retirement plans from the contributions you have made. This rule applies to distributions received in the two years before the year the credit is claimed, the year the credit is claimed, and the period after the end of the credit year but before the due date - including extensions - for filing the return for the credit year.


Other tax benefits. The Retirement Savings Contributions Credit is in addition to other tax benefits which may result from the retirement contributions. For example, most workers at these income levels may deduct all or part of their contributions to a traditional IRA. Contributions to a regular 401(k) plan are not subject to income tax until withdrawn from the plan.


Forms to use. To claim the credit, use Form 8880, Credit for Qualified Retirement Savings Contributions.

Source: http://www.irs.gov/newsroom/article/0,,id=107686,00.html

 
The Quarter Roll is published to provide personal insights and opinions on everyday ways of saving and managing money, budgeting, and reducing debt. The Quarter Roll does not give professional accounting, legal, or investing counsel. The ideas, examples, and advice presented on this site are solely the opinion of the authors based on his or her personal experiences. All photos courtesy of The Quarter Roll, iStockphoto, or Dreamstime. ©  All rights reserved. This site is best viewed when using Adobe Flash Player. free money magazine