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Saving for your retirement can make you eligible for a tax credit worth up to $2,000. If you contribute to an employer-sponsored retirement plan, such as a 401(k) or to an IRA, you may be eligible for the Saver’s Credit.

1. The Saver’s Credit (formally known as the Retirement Savings Contribution Credit can be worth up to $2,000 for married couples filing a joint return or $1,000 for single taxpayers.

2. Your filing status and the amount of your income affect whether you are eligible for the credit. You may be eligible for the credit on your 2012 tax return if your filing status and income are:

  • Single, married filing separately or qualifying widow or widower, with income up to $28,750
  • Head of Household with income up to $43,125
  • Married Filing Jointly, with income up to $57,500

3. You must be at least 18 years of age to be eligible. You also cannot have been a full-time student in 2012 nor claimed as a dependent on someone else’s tax return.

4. You must contribute to a qualified retirement plan by the due date of your tax return in order to claim the credit. The due date for most people is April 15.

5. Depending on your income, you may be eligible for other tax benefits if you contribute to a retirement plan. For example, you may be able to deduct all or part of your contributions to a traditional IRA.

Many of the provisions associated with the American Taxpayer Relief Act of 2012 (ATRA) became effective in 2013. Read more

 

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As the year draws to a close, it is a good time to take stock of your tax situation and identify possible opportunities to minimize your tax liability. Read more

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