Low and moderate-income workers have advised to take steps now to save for retirement and earn a special tax credit in 2014 and years ahead, according to the Internal Revenue Service (IRS).
The saver’s credit helps offset part of the first $2,000 workers voluntarily contribute to IRAs and 401(k) plans and similar workplace retirement programs. Eligible workers still have time to make qualifying retirement contributions and get the saver’s credit on their 2014 tax return. People have until April 15, 2015, to set up a new individual retirement arrangement or add money to an existing IRA for 2014.
The saver’s credit can be claimed by married couples filing jointly with incomes up to USD60,000 in 2014, or USD61,000 in 2015; heads of household with incomes up to USD45,000 in 2014, or USD45,750 in 2015; and married individuals filing separately and singles with incomes up to USD30,000 in 2014 or USD30,500 in 2015. A taxpayer’s credit amount is based on his or her filing status, adjusted gross income, tax liability and amount contributed to qualifying retirement programs.
Other special rules that apply to the saver’s credit includes eligible taxpayers must be at least 18 years of age, anyone claimed as a dependent on someone else’s return cannot take the credit and a student cannot take the credit.
