by 2 Cylivers
If you are a low to moderate income earner and saving for your retirement is a priority there is good news for you. You can now enjoy a special tax credit of up to $1,000 per individual, which means up to $2,000 for both spouses contributing from Uncle Sam just for contributing to a workplace savings plan. Effective immediately, the Saver’s Tax Credit will add some more money to savings in your workplace savings plan. The eligibility and size of the credit depends on your income. The credit can equal 10%, 20%, or even 50% of the amount you contribute in a year, up to a maximum of $1,000 for an individual or $2,000 for a married couple when both spouses contribute. Consider the case of a married couple filing a joint return, when both spouses contribute, with a maximum adjusted gross income of $30,000. Under the Pension Protection Act, the Saver’s Tax Credit available is 50% of workplace savings plan contribution, up to a maximum limit of $2,000. In future years, a cost of living adjustment might increase the credit.If you qualify for the Saver’s Tax Credit and need an incentive to get started with saving for your retirement, there can be no better incentive than this. Remember when it comes to savings, every dollar saved today is worth a lot more when you retire. Try your best and contribute enough in your workplace savings plan to take full advantage of this credit.
