If you are a low to moderate level income worker who is also saving for retirement, then you need to make sure you get your hands on the valuable tax credit that could be worth as much as $1,000 for individuals and $2,000 for couples. Most workers who save for retirement in 401(k)s and individual retirement accounts will be be eligible. This tax credit is called the “Retirement Saver’s Credit” and you can use the tips below to help you get it.
Make sure you are following all of these tips. They will allow you the most money and the easiest access to the Retirement Saver’s Credit during tax season.
Retirement Saver’s Credit Tips
- Contribute to a Retirement Account
- Adhere to All Income Limits
- Calculate Your Credit
- Get Twice the Tax Breaks
- Get The Right Forms
As far as getting the right forms goes. You will need all of the following forms, all of which can be found on IRS.gov.
According to US Money News, you’ll need IRS Form 8880 to claim this credit, and to attach it to your 1040, 1040A or 1040N when you file your tax return. “Don’t use the 1040EZ Form,” Collinson cautions. “If you use tax-preparation software, be on the lookout for it so you can be sure to claim it.”
Are You Eligible?
You won’t be able to claim the saver’s credit if you are under 18 years old or were claimed as a dependent on someone else’s tax return. Individuals who were enrolled as full-time students during any part of five calendar months during the year are also unable to get the credit. Rollover contributions aren’t eligible for the saver’s credit, and eligible contributions could be reduced if you have recently taken distributions from a retirement account.
For more information visit the IRS.gov website.