North Charleston, SC (PRWEB) August 24, 2007
Everyone knows how important it is to save for retirement. Unfortunately, not everyone has the financial ability to do it.
The government has a reason for offering an incentive with the Retirement Savings Contribution Credit, according to Peter Hukki, a Licensed Taxpayer Representative of JK Harris and Company, the nation's largest tax resolution firm.
"The government is trying to find a way for low income taxpayers to contribute to a retirement plan by giving them credit," said Hukki, an Enrolled Agent and member of the National Association of Enrolled Agents (NAEA).
The IRS made this credit available to qualified individuals beginning with the 2004 tax season. If a taxpayer makes voluntary contributions to an employer-sponsored retirement plan or to an individual retirement arrangement, they may be eligible to take a non-refundable tax credit.
The credit applies to the following:
- Individuals with incomes up to $25,000 ($37,500 for a head of household).
- Married couples, filing jointly, with incomes up to $50,000.
*Persons who are at least age 18, not a full-time student and cannot be claimed as a dependent on another person's return.
According to the IRS, nearly 5.3 million tax returns filed for 2005 included the Retirement Savings Contribution Credit.
A credit of up to $1,000 ($2,000 if filing jointly) can be taken if you make contributions to a qualified traditional or Roth IRA, 401(k) and certain other retirement plans.
"It is based on your Adjusted Gross Income, how much you contribute and your filing status," said Hukki.
According to Hukki, the credit rate can be as low as 10 percent or as high as 50 percent, depending on your Adjusted Gross Income. The lower your income is, the higher the credit rate will be.
Another thing to consider with this credit is any distributions you may have received starting two years before the year you are claiming the credit.
About JK Harris:
JK Harris & Company, LLC, (http://www.jkharris.com) based in North Charleston, S.C., is the nation's largest tax resolution firm and has served over 200,000 customers since its founding in 1997 by John K. Harris. JK Harris consultants are available to meet with consumers in over 450 locations nationwide by appointment only. The company also provides services for consumer and commercial debt, student loan debt, investment fraud, financial planning, tax return preparation, and audit representation.
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