If you are in the low-to-moderate income range, there are ways for you to save some extra cash. The Internal Revenue Service wants to remind taxpayers that the saver’s credit will allow you to save for your retirement while at the same time save on your taxes.
The Internal Revenue Service offers a few tips about this credit:
Save for retirement. The saver’s credit is formally known as the retirement savings contributions credit. You may be able to claim this tax credit and any other applicable tax savings. Says the IRS, “The saver’s credit helps offset part of the first $2,000 you voluntarily save for your retirement. This includes amounts you contribute to IRAs, 401(k) plans and similar workplace plans.”
Save on taxes. One advantage of the saver’s credit is that it can increase your refund or reduce the tax you owe. Individuals can receive a maximum credit of $1,000, and married couples can get a maximum of $2,000.
Be aware of income limits. The income limits will be different depending on your tax filing status. The following situations will allow you to claim the saver’s credit:
• You’re a married couple filing jointly with income up to $60,000 in 2014 or $61,000 in 2015.
• You are the head of your household with income up to $45,000 in 2014 or $45,750 in 2015.
• You are a married person filing separately or single with income up to $30,000 in 2014 or $30,500 in 2015.
For more information on when to contribute and what special rules apply, visit the IRS website.