A Sweet New Reason to Save this Year

Family

Saving has never been sweeter. In preparation for the upcoming tax season, save now and lower your tax bill later. The saver’s tax credit provides a special tax break to low- and moderate-income workers who are saving for retirement.

The saver’s tax credit can be claimed on the first $2000 you contribute to your Roth IRA, Traditional IRA, 401(k), 403(b), or 457 plan. If you have not started saving yet, you must make a contribution by the end of the year to your 401(k), 403(b), or 457 plan. However, you have until April 15, 2016 to set up a new IRA or add money to an existing IRA.

If you are eligible, the saver’s tax credit may increase your tax refund or reduce the amount of tax you owe. The maximum credit is $1,000, or $2,000 for married couples.

You may be eligible for the saver’s tax credit if you are:

    • Single or married person filing separately with an income up to $30,500.
    • Head of Household with an income up to $45,750.
    • Married couple filing jointly with an income up to $61,000.

And

    • You are at least 18 years of age.
    • Were not a full-time student in 2015.
    • Were not claimed as a dependent on another person’s tax return.

To claim this tax credit, attach Form 8880 to your tax return (Form 1040, 1040A, or 1040NR). For more information about the saver’s tax credit visit www.irs.gov/form8880

 

Chereese

Chereese is currently employed in local government. She earned her doctorate at The University of Pittsburgh. Her primary interests are in personal finance. Her goal is help increase savings and asset accumulation among low and moderate income individuals.

 

Walker's Legacy is a growing global women in business collective founded to establish networks of empowerment and access for women of color in business.

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